Michael Kors Is Dropping From Luxury To Fast Fashion. Share Prices Are Dropping.

If the luxury brand does not make in-depth analysis of its target customers, and does not make more efforts in product innovation, after-sales service and image strategy, it is difficult to maintain long-term development.

In other words, the market structure in the future will be highly refined. It is a permanent solution to take the initiative to do the market and grasp the knowledge of consumers.

Data show that as of June 30th, Michael Kors's share price fell by 44% in the past six months, far behind the increase of 0.2% in the S & P 500 index.

According to the analysis of the US market, the loyalty of the brand consumers is declining. Because of the frequent promotion strategies, the brand value is also on the discount. These factors have led to the continuous regression of the brand in the North American market.

After the fame of Michael Kors,

It is the performance support of the brand, but the number of stores exceeds the carrying capacity of the brand consumer market.

In order to stimulate consumers' desire to buy, brands are continuously discounted in outlets.

At the same time, the high-end customers are inevitably losing in the same price stores.

When the exposure rate is too frequent, the brand value is damaged because of the discount, and some young consumers also lose interest in the brand.

At the end of May, Michael Kors released its fourth quarter results in the 2015 fiscal year, showing that sales growth was only 17.8%, which was significantly slower than the 74.4% increase in the past three years.

The largest market, same store sales in North America, fell 6.7% in the three quarter, the figure has dropped to its single digit for the first time.

Joe Parsons, the group's chief financial officer, said that the North American market downturn caused the company to take a higher discount to attract customers, which led directly to 58.4% gross margin and 59.9% in the same period last year.

The chairman of the group and CEO John Idol admitted that the consumption of customers in the store was being pferred to the lower gross jewellery products, while the wrist watch products with higher gross profit and higher unit price were expected to be in fiscal year 2016.

It will accelerate the slide.

It can be said that the explosive growth of Michael Kors made the company optimistic about the long term growth of the brand.

Be relative to

The maturity of Michael Kors officially announced its entry into the Asian market last autumn.

China and Southeast Asian countries will be concentrated markets.

However, with the maturity of Chinese consumers, the smooth flow of information at home and abroad, and a brand that has been outdated in China, it is hard for Chinese consumers to be obsessed with brands as expected.

Not long ago, a Michael Kors appeared in the Chinese market: in the United States, it was accused of price fraud and lost 4 million 880 thousand dollars.

Consumers found that the brand name tag on the products sold in the outlets will mark a "manufacturer's suggested retail price" which is higher than the actual price. The proposed price has never been used as a real price, and is specially designed to stimulate sales.

However, discount can stimulate consumers' desire to purchase in the short term.

Recently, as luxury goods have been cut down in the Chinese market, Michael Kors stores have started the lowest sales promotion to 50 percent off.

There was a long line of stores in the first floor of Xidan's Joy City in Beijing.

Similar promotional tricks are common in the domestic market.

But as an expensive luxury brand, this is not conducive to good reputation and brand image.

As a luxury brand, that is, "affordable luxury", its declared quality and image are enough for luxury goods.

But from the perspective of brand history, storytelling and brand modulation, Michael Kors does not have this property.

In terms of quality, the classic style of luxury goods is kept high, but the design has a certain degree of fashion, leaving the brand historical connotation and the characteristics of luxury produced by hand crafted. The rapidly rising light luxury brand is only a fast fashion leather brand with high-end positioning.

Zhou Ting, Dean of the Institute of wealth and quality, thinks that the concept of light luxury is itself a marketing gimmick.