Michael Kors Holdings, LTD recently announced their first quarterly earning report since their recent successful IPO, on December 15. Not surprisingly , they were exceptional, in fact their revenues were up for third quarter by 67.9% and comp store sales were up 38%. The red-hot company is planning to open 20-30 more stores in North America in fiscal 2013, as well as many more stores in Europe and Japan.
Michael Kors’ business today is a hard-won success after a long career of ups and downs. His appearance in Project Runway helped to make him a household name in the US, but his brand speaks for itself. The company offers the designer Michael Kors luxury collection and the aspirational Michael Michael Kors lower priced line. He has created an urbane brand of sexy, glamorous pieces for sophisticated city slickers (or wannabes). There is no doubt about what you can expect in his free-standing stores: sharp and sexy shoes, statement signature bags, bold jewelry, power-hungry watches and tight collections of sleek, wearable apparel. His direct, social and online marketing are unswervingly messaged.
Clear brand vision gets rewarded with growth consistent with the size of your market niche, i.e. Ralph Lauren, Coach, Anthroplogie, Lululemon, Vera Bradley, etc. Kors aspirational luxury niche is a large and viable one, so he has a big growth trajectory ahead of him. The Michael Kors brand isn’t yet as well-known as Coach, which makes his future prospects even greater. There aren’t many mall competitors other than BCBG, chasing his fashion saavy, urbane audience. BCBG tends to be a tad more youthful and contemporary so their apparel fits are more challenging to an audience over 40. Smartly, Michael Kors has focused on ageless accessories, apparel is more of a punctuation to the story. (BCBG has some very formidable accessories, but focuses on clothing.) Kors reports that 62.3% of sales come from accessories and fragrances. Women’s apparel in general, has become more of a commodity, where bags and shoes still offer better turns and pricing power.
The runway is long and wide for a big take-off for Michael Kors!