Michael Kors Wants To Enter Multi Luxury Brand Group

The extravagant industry broke out this year, but probably just started.

After buying Jimmy Choo,

The group did not intend to stop.

John D Idol, the group's chief executive, said at the Morgan Stanley Global Consumer and retail Conference on Wednesday that it was actively looking for new buyers. He stressed that it would favour the acquisition of mature and potential brands, but did not disclose specific details.

According to the world clothing and shoe net, in July of this year, Michael Kors group (NYSE:KORS) bought the British luxury shoe brand Jimmy Choo for $1 billion 200 million. The paction was officially completed at the end of October, and Jimmy Choo has been delisted. Now it is officially classified as Michael Kors group.

Some analysts said that Michael Kors group bought Jimmy Choo, indicating that the group's decision to enter the multi luxury brand group.

A New York

Yesterday, a well-informed source told reporters that Michael Kors was trying to emulate the Coach mode of the competitor and changed the group name. However, it is still at the preliminary stage of discussion and has not yet finalized such a practice.

The Michael Kors group was listed on the New York stock exchange in December 15, 2012 with the stock code of KORS.

The IPO raised $1 billion 100 million.

On Wednesday, Michael Kors group appointed Francesca Leoni as senior vice president and chief brand officer. Francesca Leoni will join Michael Kors group in February next year as senior vice president and Michael Kors.

Global brand officer, and report to Group CEO John D Idol.

Previously, Francesca Leoni has been the director of global communications at Valentino, and has been the director of public relations at Hermes.

Up till now, Michael Kors has not commented on changing the name of group name.

At present, Tapestry is moving towards multi brand groups.

Some analysts pointed out that after the acquisition of Jimmy Choo, the group name may not meet the needs of development, after all, the positioning of Jimmy Choo is also higher than that of Michael Kors.

At present, Michael Kors is not only a group name but also a brand name, which is out of date with the goal of becoming a multi brand group.

Last month, Coach group, a rival of Michael Kors, suddenly announced that it was renamed as Tapestry to reflect its new form as a multi brand luxury group.

The name change will take effect in October 31st. After renaming, the group's code on the New York stock exchange will change from "COH" to "TPR".

Group chief executive Victor Luis said in a statement that the group's dominance of Coach has changed to become a comprehensive light luxury group with three independent brands, so its original name is no longer applicable.

At present, apart from Coach, the group also owns Stuart Weitzman and the newly acquired Kate Spade brand.

In order to reduce the damage to brand image caused by over promotion, Michael Kors has been reducing the shipping volume of department stores, and John D Idol has repeatedly stressed that it will stimulate revenue growth through acquisition and updating of product design in the future.

At present, the group is actively implementing the plan called "Runway2020". According to the latest performance data, it is gradually recovering its lost market share.

The picture is Michael Kors, the world's first spokesperson, Yang Mi and Michael Kors chairman and chief executive officer, John D.Idol.

In the second quarter ended September 30, 2017, Michael Kors sales rose 5.4% to $1 billion 150 million, up from $1 billion 40 million expected by Wall Street analysts, while net profit rose 26.1% to 202 million 900 thousand US dollars and gross margin reached 60.2%.

During the period, the group shoes and clothing business recorded double-digit same store sales growth.

Among them, retail channel sales increased by 8% to US $645 million over the same period last year, mainly due to the growth of 56 new stores in the period and the growth of e-commerce channel business in Europe and Asia. The sales volume of wholesale channel of the group increased by 2.5% to 463 million US dollars.

Sales in Asia, including the Chinese market, surged 30.4% to 124 million dollars over the same period last year. It is worth noting that Michael Kors announced in September 12th this year that Chinese actress Yang Mi became the world's first brand spokesperson.

John D Idol revealed in the earnings report that the Michael Kors 2018 spring summer series has been highly praised by the industry after its launch, and Yang Mi, the brand's new image ambassador, has also had a positive impact on sales in China.

In the Alibaba's latest report on the impact of star consumption, Yang Mi was named the most influential Chinese star for consumers with a combined score of 128.5.

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In terms of products, Michael Kors group will introduce more new types in the future, and expand the proportion of products such as smart watches, footwear and clothing for men and women, so as to reduce dependence on core handbag business.

In addition, the Michael Kors brand will also increase its advertising investment in new products such as Mercer bags and Bancroft handbags.

Earlier, analysts said that Michael Kors group would buy Jimmy Choo, which would help improve the overall sales of footwear.

Under the promotion of effective digital pformation measures, Michael Kors has more than 38 million social media accounts during the reporting period.

Michael Kors has become the most popular lightweight luxury brand. It has become a strong rival with Coach, a lightweight luxury brand of more than 70 years in just ten years.

At present, the Coach brand is still in the throes of pition. Its revenue is frustrated because the company withdraws its products from the department store shelves in order to maintain the high-end positioning of the brand, which means that the group's revenue growth is inhibited.

In the first quarter of September 30th, Tapestry (NYSE:TPR) sales surged 24% to $1 billion 290 million, but lower than Wall Street's forecast of $1 billion 310 million, gross profit margin was 59.3%, operating profit decreased 4% to 16 million 900 thousand US dollars.

Despite significant growth in overall sales of Tapestry group, sales of core brand Coach fell 3% to $924 million, while global same store sales fell 2%, operating profit of 198 million dollars and gross margin of 68.4%.

The group said in its earnings report that Coach's performance during the period was mainly affected by hurricanes in North America and typhoons in Asia.

Some analysts pointed out that in order to stimulate revenue growth, Michael Kors and Tapestry group will continue to start the arms race.

Now the industry has pointed out some potential buyers of the two groups, many of which are from Europe. The accessories brands mentioned by industry analysts include Italy's Furla, France's Longchamp and Swiss luxury brand Bally. The first two are family businesses with strong growth performance and shops all over the world, while the bankers engaged in luxury goods also mentioned another traditional British brand Mulberry.

According to the latest data released by McKinsey and consultancy, in 2016, Chinese consumers bought 640 billion yuan of luxury goods, including luxury and light luxury, accounting for 32% of the global consumption of the category, and predicted that it would grow at 8-10%, reaching 14000 billion yuan in 2025, accounting for 44% of the global consumption of luxury goods.

Among them, light luxury consumption accounts for 36% of China's total luxury goods, and its historical growth rate exceeds that of luxury consumption.

In the long run, China's light luxury market has great potential for development. It is estimated that in the next five years, sales of light luxury products will increase to 11%-13% and increase to 620 billion yuan in 2025.

In the past 3 months, the stock price of Michael Kors has increased by 31%, while the Tapestry group has almost no growth. The market capitalization of the two groups is 8 billion 600 million and 11 billion 600 million respectively.

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