MK Completes Multi Brand Layout Competition In Group Competition

In order to improve the ability to resist risks, many fashion brands began to enrich their brand portfolios to break through.

After the acquisition of Versace, the parent company of Michael Kors immediately renamed the Capri group, which coincided with that of Coach, and renamed it after completing the 3 brand collections to show its formal pition to multi brand group.

Direct alignment of Coach parent company Tapestry group, from brand to channel, from business line to China strategy, the competition between the two big luxury groups has intensified.

In the view of Zhou Ting, Dean of the Research Institute, pluralism is not a wise move. It is more important to concentrate on strengthening the main brand.

Positioning and reshaping

In order to seek market competitive advantages, the seesaw battle between light luxury groups has never ceased.

The Michael Kors parent company has been officially renamed the Capri group recently, but it is noteworthy that the group's renaming is based on the completion of the acquisition and the group has 3 brands.

Obviously, the strategic direction of Capri group is exactly the same as that of rival Tapestry group, and the former has been effectively emulate the latter.

In 2017, after the Coach parent company took the lead in acquiring Kate spade, as the predecessor of Michael Kors group, Capri bought the British luxury shoe brand Jimmy Choo for a price of 1 billion 350 million US dollars. After a year, the group bought Italy luxury brand Versace at a price of 1 billion 830 million euros.

It is easy to see that the choice of the group's acquisition target is intended to enhance the positioning of the group.

Michael Kors Group China also mentioned to the Beijing Business Daily that after the completion of the acquisition, the company will locate the luxury group and expect to raise its income by 33% to 8 billion dollars.

Obviously, the multi brand ambition of Coach parent Tapestry group has long been revealed.

At present, Coach, the core brand of the group, is undergoing a younger pformation. In 2015, the group bought the Stuart Weitzman, which was the most popular shoe brand of the first lady of the United States at the US $530 million in 2017, and bought the young line brand Kate Spade for another US $2 billion 400 million in 2017.

Subsequently, the group formally announced that it was renamed Tapestry.Inc. by Coach.Inc..

Zhou Ting believes that, from the road and development of the two acquisitions, Capri is consciously high-end to upgrade the brand grade; and Tapestry is trying to enhance the relative advantages of the light luxury field.

In addition, renaming is a new start for the group, but for consumers, the new name is not high enough to remember.

Each has its own merits

The business tug of war between the two big groups that started out with light luxury brands has almost never stopped.

At present, the younger Capri has taken the Versace and Jimmy Choo, and has begun the road of high-end.

But Tapestry intends to pform young people from design to marketing, and constantly deepen the advantages of luxury brands.

Beijing Business Daily reporter found that the Tapestry group business line is the two largest bag brand and a shoe brand, of which the core brand Coach is in a younger pformation, and the main young and active Kate Spade is also hard to hide.

Capri group is a core bag brand and two shoe brand.

And the two groups still retain their original brand designers.

In terms of channel, Capri group has focused on new media marketing in the past year, including micro-blog, WeChat and jitter.

Zhou Ting believes that the two groups are very important in terms of channel advantages, and OLE is important to both sides.

In terms of product quality and product design, Tapestry has obvious advantages; it is obvious that Capri is trying to compete with Tapestry in competition through merger and acquisition, and China is an important market for both sides. Tapestry has more advantages in marketing Chinese market.

But she stressed that at present, the diversification of the two groups is not a wise move. The concentrated budget will further strengthen the growth of the main brand and make a product diversification around a brand, and the possibility of success is even greater.

At the same time, diversification is not effective for every group. Different luxury group, supplier resources, designer resources, publicity resources, channel resources and so on have their own advantages and points. Some can make use of the brand combination to give full play to their advantages and values, but not necessarily.

The most effective diversification is based on the advantages of a certain customer group. Based on the diversification of a few brand products, the chances of success will be greater, rather than brand diversification. Customers' attention to brands will gradually decrease, and multi brands will not represent more sales and more customers.

Diversification fragmentation

It is noteworthy that the two major light luxury groups have seen signs of lower than expected or even decline after their collectivization and renaming.

Tapestry Group CEO Victor Luis has stressed that the group's dominance of Coach has changed to become a comprehensive light luxury group with three independent brands.

Zhou Ting told the Beijing Commercial Daily reporter that after renaming, it is bound to affect the recognition degree, the old customers leave or even the performance will decline, based on the new brand communication and the customers need time, but after that, it may also become better immediately, such as the use of strong brand's brand publicity resources or channel resources, but this kind of situation is rare.

The conglomerate of light luxury group is undoubtedly to replicate the success of single brand, increase the positive competitiveness of luxury group, especially the competitiveness of hard and luxurious areas, maximize the value of existing channels and customer resources, and try to "tell stories to the capital market, relieve or shift the existing pressure and contradictions".

Zhou Ting predicts that the quality gap and price gap between light luxury goods and mass consumer goods will be smaller and smaller in the future.

In addition, all light luxury brands will strengthen online marketing in a wide range while closing stores. It is expected that online marketing will increase substantially, and individual brands will double or even more than the same year's budget, while ole is still the most important channel for light luxury brands, and will still maintain sales growth.