Michael Kors Holdings: How to design a winning growth strategy
- ID: 2482578
- January 2013
- 26 Pages
Michael Kors operates in the luxury end of the fashion and retail sector. It engages in the design, marketing, distribution, and retail of branded goods. The company started as an American luxury sportswear house in 1981, and in about 30 years transformed into the global luxury accessories, footwear and apparel brand, with a global presence and stores in most prestigious cities in the world.
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- The global luxury goods retail market, worth $226.6bn in 2012, continues to create growth opportunities. It is expected to grow at a compound annual growth rate (CAGR) of 7.8% towards 2014. Growth is primarily driven by leather goods, shoes, accessories and jewelry & watches categories. Asia was the fastest growing luxury market in 2012.
- Accessories and footwear generate most of Michael Kors' sales and appeal to a wide variety of demographics; the company's target customers are 25 to 54 years old, with annual income above $50,000. Kors' further growth strategy includes targeting a younger, affluent demographic, often overlooked by luxury brands.
- North America is Kors' largest geographical market. It is also pushing to build its presence internationally, mainly in Europe and Asia-Pacific, with revenues in - Europe growing at 182.6% and sales in Japan increasing from $1m in 2011 to $10.2m in 2012. The company has an innovative approach to marketing and is an example of omni-channel retail.
Your key questions answered
- What is the size of the global luxury goods retail market and its primary drivers of growth? Which regions are increasing at the fastest rate?
- Who are the main competitors? What is the size of Michael Kors business? What is Kors' growth strategy? What is Kors' rate of revenue growth?
- How to target wealthy consumers of all age groups?
- How to allow the expansion into more affordable territory without diluting the value of higher-end goods? SHOW LESS READ MORE >
GLOBAL LUXURY GOODS MARKET CONTINUES TO CREATE GROWTH OPPORTUNITIES
Global retail sales of luxury goods increased in 2012
Luxury goods market is expected to grow strongly towards 2014
Leather, shoes and accessories are driving luxury sales
Asia was the fastest growing luxury market in 2012
Luxury market is cyclical and dependent on consumer spending habits
Fast response to changing fashion and retail trends is essential
Luxury fashion competitive landscape
FROM A SPORTSWEAR HOUSE TO GLOBAL LUXURY BRAND
Michael Kors - luxury retailer present in the most prestigious cities in the world
From a luxury sportswear house to a global accessories, footwear and apparel brand
Combining elegance with sporty attitude to target wealthy consumers of all age group
Kors brands target a broad customer base, keeping luxury image at the same time
Kors' collections prices range from $20 to $4,000
Kors collections are carried in leading department stores throughout the world
Retail segment generated a majority of Kors' business in 2012
Kors had a total of 237 retail stores, with 71 open in 2012
Kors wholesale segment reached 2,677 department and specialty stores in 2012
GROWTH DESPITE SLUGGISH ECONOMY
Despite sluggish economy Kors is growing its revenues at a double digit rate
Robust revenue growth in all channels
North America is Kors' largest market, generating vast majority of retail and wholesale business
European sales increased at a triple digit rate in 2012
Revenues from Japan increased by $9.2m in 2012
Kors is targeting younger affluent demographics
Kors' number of stores increasing at a double digit rate
Kors spending on advertising up by 14.6% in 2012
Omni channel approach and innovation are important elements of Kors' marketing
Responsive design system to capitalize on 425 million smartphone Facebook visitors a month
Kors marketing efforts resulting in huge y-o-y Facebook fan base growth
Multi-channel growth strategy and successful brand management
Successful penetration of new geographical markets and reach for wider audience
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