Michael Kors, the iconic brand that made its fortune on leather bags and accessories, is now on the list of those companies that got dragged into the so-called retail crisis.
The designer, born Karl Anderson, Jr, started his career at a very young age. He was discovered by Dawn Mello, the fashion director of the Bergdorf Goodman departmet store, who gave the start to his career. He launched his own pret-a-porter collection in 1981 which was sold through the Bergdorf Goodman stores. In 1997 he joined the french company Celine as creative director while working on his own collection. Once Michael Kors left Celine in 2003 he concentrated on his own company and started the most successful years of the Michale Kors’s venture.
In February 2015 the New York Times reported:
“Michael Kors‘s shares rose as much as 26 percent on Tuesday after the company released its first earnings report as a publicly traded company. It priced its I.P.O. two months ago at $20 a share; on Tuesday afternoon, the stock was trading as high as $42. The company has a market value of about $8 billion”
That same year the company officially announced its plans of expansion: 45 new stores in the United States and more than 500 shops-in-shop that were supposed to further increase the net sale of the Michael Kors’s items.
Two years later the scenario has suddenly changed. According to Cnn Money:
“Michael Kors stock tumbled nearly 10% on the news to the lowest level in more than five years. Shares are now down 24% so far in 2017.”
The meteoric rise in sales and the popularity of the brand seem to be facing the same challenges that other important retailers have faced recenlty.
The competition of other brands specialized in bags and accessories like Kate Spade or Coach (with the latter about to buy the first one in a 2.4 billion deal) has for sure affected the plans of expansion of the Michael Kors’s company, but the fall of the stocks must be also ascribed to the e-commerce era.
The changing customer behaviour plays an important role in the recent bankruptcies and re-organizations that have involved extremely fashionable brands like J.Crew and Abercrombie & Fitch.
Iconic department stores like Macy’s and Jc Penny are now dealing with the most difficult decisions and the closure of more than 100 stores of the Michael Kors’s brand is confirming how the retail world will not be the one we used to know in the upcoming years.