The Michael Kors Takeover
Written by: Maya Schaefer
The Michael Kors Takeover
As recent shoppers have been looking for the new perfect bag for the upcoming season many have turned away from the traditional brands like Coach or Louis Vuitton and to Michael Kors. Michael Kors has prided himself as a designer of a high-end product for an affordable price. As Michael Kors attended the Fashion Institute of Technology in New York City he soon dropped out and it wasn’t until years later he became a household name around the world. When Michael first came out with his collection it was primarily a high-end sporty collection focused for upper eastsiders the brand later evolved into an image that is commonly seen on the red carpet worn by A-list celebrities.
In this past December, the brand Michael Kors went public on the stock market and since then share prices have skyrocketed. According to Bloomberg.com “Michael Kors’s shares have more than doubled from their $20 offering price in mid-December, while Coach has advanced by about a third since then. The Standard & Poor’s Supercomposite Apparel and Accessories Index gained 28 percent.” Over the past three years stocks have risen over 500% gaining a fan base in which Michael is creating bags with a trendy edge but also keeping that timeless touch, a bag for everyone. Competing brands such as Coach and Louis Vuitton which have been around for years, but it’s been made clear that Michael Kors is here to stay.
Company Name | FY 2011 Revenue | 2011 YoY Growth | FY 2012 Revenue | 2012 YoY Growth | FY 2013 Revenue | 2013 YoY Growth |
Michael Kors | $1.3 Bil. | 61.9% | $2.18 Bil. | 67.7% | $3.21 Bil. (Est.) | 47.25% (Est.) |
Coach | $4.16 Bil. | 15.2% | $4.76 Bil. | 14.4% | $5.08 Bil. | 6.72% |
Louis Vuitton | $23.66 Bil. | 16.4% | $28.1 Bil. | 18.8% | $29.15 Bil. | 3.74% |
While Michael takes over the United States with multiple collections Michael also has made it into the European culture which solidifies that the brand is expanding permanently. Although some europeans are sticking with their homeland brands it isn’t uncommon to see this United States brand on the streets of Europe. With stores continuing to open in Europe it would be foolish for investors not to consider adding Michael to their collection of stocks. According to The Motley Fool website on an article titled Forget China: Michael Kors Real Market Growth Is Europe it states “ More and more often, European consumers are trading in their European luxury brands for that of American fashion designer Michael Kors Holdings Ltd. (NYSE: KORS ) . We can already see this trend take flight as Michael Kors' sales in Europe climbed higher in its fourth quarter of fiscal 2013. Not only did Michael Kors threaten the sales of handbag designerCoach (NYSE: COH ) in the United States, it is now challenging French luxury brand LVMH Moet Hennessy Louis Vuitton (NASDAQOTH: LVMUY ) in Europe.”
In 2004 Michael Kors added a line called MICHAEL by Michael Kors to department stores to help rise sales with a more affordable accessory line. Since then more than 4,000 department stores have started to carry his line. With other designers creating accessory lines to try and compete; Michael still takes the gold. While Michael Kors has only been around for 33 years it has grown tremendously in the past decade and is still rapidly growing, taking over the fashion world one bag at a time.
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