Michael Kors Reopens Its Brand Acquisition Business And Focuses On Asia.

According to the world clothing shoes and hats net,

Multi location

After the group changed its name to "Brocade", the Michael Kors, which belonged to the light luxury camp, announced that it would look for mature brand acquisitions and create multi brand groups at the recent retail conference.

The light luxury brand hopes to replicate the collectivization operation of European luxury magnates, strengthen the anti risk capability through brand acquisition, strengthen the upstream layout of the industrial chain, control the manufacturing of raw materials and processes, and hope to form a diversified and large-scale effect.

But the risk lies in the fact that what brands to acquire are very important. The repositioning after the merger, the synergy between brands and the optimization of channels are the great challenges of multi brand management.

Re start brand acquisition

Michael Kors will continue to buy the brand plan after the Jimmy Choo is in its pocket.

At the Morgan Stanley Global Consumer and retail conference, John Idol, CEO of Michael Kors, said that the main task of Michael Kors is to pay off the loans generated in the Jimmy Choo paction. At the same time, the group is also actively looking for new acquisitions, making Michael Kors a multi brand group.

And stressed that Michael Kors will be biased towards mature, potential brands that are highly recognized outside the US market, and will not consider buying brands that need thorough reform.

Prior to this, Michael Kors announced the acquisition of Jimmy Choo for $1 billion 200 million. After the completion of the paction, the two brands still maintained independent operation.

It is reported that Jimmy Choo positioning high-end.

Footwear brand, business category including shoes, bags and perfume.

In the first half of 2017, the net income of the company was $17 million 500 thousand, and the pre tax profit increased by 22.4%, which exceeded the total profit of 2016.

Among them, Japan's revenue growth was 11%, the rest of Asia was 8.2%, and the mainland of China also maintained a two digit growth rate.

In the 2016 earnings report, the Asian market, excluding Japan, was 56 million 300 thousand pounds, up 33.4% over the same period last year. Mainland China, Singapore and Malaysia played a major role in improving their performance.

It is understood that Michael Kors's own shoe brand sales account for only 11% of the total sales, while Jimmy Choo has 75% of its revenue from shoes. This acquisition helps to increase the proportion of Michael Kors shoe brand in total sales, which is about 17%.

In the latest earnings report, group sales rose 5.4% to $1 billion 150 million, up from $1 billion 40 million and $1 billion 60 million expected in the first quarter report, including Asian sales in the Chinese market, which rose 30.4% to 124 million US dollars over the same period last year.

Yang Dayun, President and fashion expert of UTA Fashion Management Group, said whether Michael Kors or Tapestry is now facing the problem of finding new profit growth points.

For example, Tapestry mainly expands the product line in clothing, and Michael Kors is to increase profitability in shoes.

Therefore, light and luxury are looking for new opportunities through the acquisition of new growth categories.

Multi brand trend

Recently, there has been a wave of "M & a boom" in the field of light luxury and even luxury goods.

Coach, a former light luxury camp, also launched a takeover plan to complete the acquisition of Kate Spade for $2 billion 400 million.

After that, the Coach.Inc. of the 3 brand collections was renamed Tapestry.Inc. to show the pition to the multi brand group.

Tapestry CEO Victor Luis believes that the name is related to the fashion industry and has higher plasticity to facilitate the group to expand the Eurasian market.

However, for the consumers of Tapestry, they have begun to turn to the younger market, but their new names are old and old, with low awareness and inconvenient memory.

In addition, the share price fell 3.2% to 38.72 U.S. dollars / share on the renamed day. In the latest earnings report, the group's net income loss was as high as 18 million US dollars.

Yang said that the loss of Tapestry is due to a substantial increase in product prices. Meanwhile, the quality of products is gradually approaching to luxury goods such as Prada and GUCCI.

But for Tapestry product positioning change, consumers need to adapt to space, or even lose some of the original consumer groups.

On the other hand, the main market of Tapestry is in the United States, and from the end of 2016 to the first half of 2017, the overall market performance of the United States was sluggish, and many department stores and retail outlets closed up.

It is worth mentioning that in 2015, Tapestry bought Spanish high-end women's clothing and footwear brand Stuart Weitzman for 574 million US dollars. After that, it began to rapidly enrich the footwear category, aiming to develop a modern luxury brand with integrated clothing and footwear as well as the combination of handbags and accessories.

Judging from the signs of the development of light luxury brands, it has already gone through the "bonus stage" of the original promotion, that is, the brand growth is slowing down.

Tapestry group's net sales in fiscal year 2017 amounted to US $4 billion 490 million, unchanged from 2016, and net sales in 2015 was US $4 billion 190 million.

Michael Kors sales in the two quarter of 2017 amounted to $1 billion 150 million, and sales in the first quarter were $952 million 400 thousand. In the last fiscal year, Michael Kors suffered the first quarterly loss in the fourth quarter sales, and sales fell 11.2% to 1 billion 60 million dollars over the same period last year.

Reporters noted that as China's luxury goods market driven by the global luxury fashion industry became more and more obvious, many brands began to increase investment in the Chinese market.

Michael Kors started the Chinese market this year and stepped up the layout of the electricity supplier channel.

In addition, Michael Kors mentioned in the "Runway 2020" restructuring plan that it will close 125 stores worldwide, but plans to increase 100 stores in Greater China within the next three years.

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Facing management risk

The luxury market is not completely stable, and the frequent mergers and acquisitions between brands are also reasonable.

Tapestry and Michael Kors also claim to build a modern luxury group.

Some analysts believe that the light luxury brand hopes to replicate the collectivization operation of European luxury giants, strengthen the anti risk capability through brand mergers and acquisitions, strengthen the upstream layout of the industrial chain, control the manufacturing of raw materials and processes, and hope to form a diversified and large-scale effect.

But the risk lies in the fact that the brand of M & A is very important. The repositioning after the merger, the synergy between brands and the optimization of channels are the great challenges of multi brand management.

LVMH, a luxury goods giant, is also making new moves in this wave of mergers and acquisitions.

Last year, LVMH bought luxury wear suitcase RIMOWA and bicycle wear brand Rapha. At the beginning of this year, LVMH group president Bernard Arnault has expressed no optimism about future performance, and the group will continue to rely on mergers and acquisitions to expand its market share.

After that, LVMH bought the Christian Dior fashion department at Euro 6 billion 500 million in April.

A few days ago, the Belgian rich Albert Fr re re, which has long been working with Bernard Arnault, increased its share of Burberry shares from 4% to 6%, and LVMH repeatedly threatened to buy Burberry.

LVMH, who has been dissatisfied with the industry, has passed the luxury winter of the past just because of its brand.

LVMH group has 70 brands, mainly in wine and spirits, clothing and leather goods, perfume, cosmetics, watches and jewellery and specialized retail.

In the 2016 year of the sluggish luxury market, the group's sales volume was 37 billion 600 million euros, up 5% from the same period last year, unchanged from the 2015 fiscal year. Net profit was 8 billion 100 million euros, up 10.2% over the same period last year.

Among them, the sales volume of fashion and leather products is 12 billion 780 million euros, supporting group performance growth.

Yang told reporters that light luxury brands have consistency in management and product design.

Relative to luxury and luxury, on the one hand, there will be individualized demand for light luxury and heavy luxury. On the other hand, light luxury should be faster and cheaper in commodity circulation.

But if you want to do fast fashion, it will be a big problem.

First of all, the two groups are different in positioning, and their location is different. Business differences will be very large, including operating resources, channels and demand for funds, and the requirements of the company's management of supply chain are very different.

On the whole, mergers and acquisitions among different categories of light luxury brands can not only learn luxury groups to spread risks on multiple brands, resist the impact of economic downturn, but also share resources in channels and operations.

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