Lightweight luxury Michael Kors’ net profit soared in the second quarter
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According to the financial report, sales for the quarter were US$704.03 million, a year-on-year increase of 38.9%, of which retail sales revenue was US$355.6 million, which represented a year-on-year increase of 46.8% and net profit of US$145.8 million, a year-on-year increase of 49.1%. Gross profit margin increased by 1.5 percentage points year-on-year to 60.8%. This was mainly due to a 22.9% increase in same-store sales and a net increase of 83 new stores in the past year.
From various regions, Michael Kors' sales in Europe jumped 101%, while same-store sales increased by 45%; sales in its North American region grew by 31%, same-store sales increased by 21%, and sales of authorized products based on watches and glasses increased significantly. %.
Although the growth rate of this quarter has slowed down compared with the high growth in the previous quarter, its expansion rate continues. As of September 28, 2013, Michael Kors had 352 stores worldwide (including department store counters), a year-on-year increase of 31%, and another 125 franchise outlets.
Kate Spade, which belongs to the Fifth & Pacific Group in the United States, has undoubtedly become the life-saving straw of the entire group. After the group just sold the lossy Juicy Couture in October, the next step is to consider the sale of Lucky Brand and specialize in the strong momentum of Kate Spade.
According to the third-quarter financial report, Kate Spade's sales rose by 76.4% from the same period last year to US$179.7 million, including Kate Spade Japan’s 25 million sales credit, and same-store sales increased 31% year-on-year. Its CEO, William McComb, said that Kate Spade’s handbags and small leather goods have grown very strong, with a high rate of repeated purchases targeting young consumers.
"Kate Spade and Michael Kors have one thing in common: the speed of opening stores in the world in the last year or two is very fast, and their total number of stores opened can reach three digits, because the large amount of store sales stimulates faster sales growth; Second, consumption Those who have already become lazy about traditional old-fashioned luxury goods, they need new brands to meet the diversification of their needs. Third, the problem facing luxury brands themselves is that with the escalation of consumption, the core consumers are leaving them. Consumers who have lost from the big brands of luxury goods flow into these new brands. Fourth, these so-called luxury brands are cost-effective, prices are not as expensive as first-line luxury goods, but the quality is OK, and the design is very trendy and stylish. "The treasurer of the Institute of Wealth Quality Zhou Ting explained the rapid growth of light luxury brands.
Accelerate the rush to the Chinese market
On December 15, 2011, Michael Kors officially landed on the NYSE, issuing it at a price of 20 US dollars. As the performance continues to rise, the stock price has risen to 81 US dollars.
Prior to the listing, Michael Kors had only a handful of stores in China. There were only one store in Hong Kong, Shanghai, Tianjin, and Suzhou, and there were only 231 stores worldwide. At the beginning of 2012, Michael Kors Group, which was just listed, announced high-profile announcements of a vigorous expansion of the Chinese market: “In the next three to five years, we will open 100 stores in this (China) marketâ€, John Idol said in a statement to foreigners, including Beijing. , Shanghai, Chengdu, Shenyang and Nanjing.
In order to better develop the Chinese market, Michael Kors dived Lida Kang from DIOR as CEO of Greater China in mid-2011. After joining Michael Kors, Li Dakang was fully responsible for Michael Kors’ expansion plans in mainland China, Hong Kong, Macau and Taiwan in the coming years.
As a US-based brand, Michael Kors accounts for as much as 90% of the North American market, and the market is relatively mature. Michael Kors is currently transforming counters in department stores in North America into in-stores. This also makes "going out" the key to its next development. In terms of volume, the capacity of the Chinese market is far greater than that of North America. Therefore, Michael Kors continues to make efforts in China, including previously held fashion events in China, and even this year may also hold a real debut in Shanghai.
In order to further win the goodwill of Chinese consumers, in 2013 Michael Kors' autumn/winter big show, in addition to inviting the Chinese model industry's “Five Golden Flowers†​​to go on a catwalk, they also invited Chinese fashion bloggers and stars to visit the show. More in China through the Internet.
Of course, emerging markets other than China are also the target market for Michael Kors. According to Indian media news, it is already working with India's luxury retail company Genesis Luxury Fashion Pvt. Ltd to enter the Indian market with a franchise model in the capital New Delhi. DLF Emporio Mall, an upscale mall, opened its first store in the country.
For the future development, John D. Idol is full of confidence. In this financial report, he stated that the global demand for this luxury lifestyle brand is still very strong.
Kate Spade teamed up with Korean clothing group to open up China market
Compared with COACH and Michael Kors, the older companies in the light luxury industry, Kate Spade entered the Chinese market lately. In 2012, Kate Spade officially began to expand the Chinese market on a large scale.
Kate Spade is an American brand with handbags and shoes. Currently, it has 41 stores in the United States. It has flagship stores in Brazil and London, and it is sold worldwide through more than 400 outlets. Although popular in the Asian market, its expansion has been limited.
In order to greatly expand its business in Asia, especially in China, in June 2011, Kate Spade, a joint venture company formed by Kate Spade and South Korea's clothing and clothing group, was responsible for the operation of the Chinese mainland market. The initial period for the joint venture was set at 10 years. Since 2001, Kate Spade's mainland and Southeast Asia businesses have been exclusively represented by Goballuxe. According to the agreement, Kate Spade has withdrawn its distribution rights in China and Southeast Asia in 2011 and 2014, respectively.
In September this year, in order to further develop its Asian business, Kate Spade established its Asia Pacific headquarters in Hong Kong to lead Asian business (except Japan). Its business scope includes: Hong Kong, Macau, South Korea, Philippines, Australia, Singapore, Malaysia, Indonesia, and Mainland China. Thailand and other places, and from Hong Kong luxury department store Harvey Nichols Joe Wong (Huang Jiaqiang) took charge of the Asian business, served as senior vice president of Kate Spade Asia.
It is reported that Joe Wong has nearly 30 years of experience in the Asia-Pacific luxury retail industry. He served as an executive at Lane Crawford Group, and served as President of GUCCI Greater China from 2006 to 2012.
Waiting for Kate Spade now seems to be opening up shop in the Chinese market. The group stated that Kate Spade plans to open more than 20 boutiques in Mainland China during the two years from 2013 to 2014. Up to now, Kate Spade has opened 17 stores in Beijing, Shanghai, Shenyang, Suzhou, Wuxi, and other cities, completing the set targets just around the corner.
In the product line, Kate Spade has become increasingly diversified. In May this year, a new fragrance line was launched. Craig Leavitt, chief executive of Kate Spade, said that the perfume is very important to the development of Kate Spade, because the brand's goal is to become a full-fledged lifestyle brand that encompasses garments, watches, jewelry, stockings and more.
For a brand with fashionable young girls as the main consumer group, Kate Spade is more likely to accept new things in marketing. In June of this year, eBay, the largest e-commerce transaction platform in the United States, opened a "shopping window" for Kate Spade and sold 30 new Kate Spade Saturday young fashion brands under Kate Spade.
Reporter observation
It is difficult to grow long
The bright performance of light luxury brands has made the fashion circle shout "it is a luxury," but whether this high-speed expansion and high-speed growth can continue to be unknown, but perhaps we can spy on the development of COACH, the originator.
After experiencing a series of rapid growth, COACH has also shown a lack of growth. According to COACH's first-quarter financial report in FY2014, sales were US$1.15 billion, a year-on-year decline of 1%, and operating income also decreased by 3% year-on-year. In the North American market, Michael Kors’s constant efforts have been exerting itself. The trend has been slowing recently. Total sales decreased by 1% to US$778 million from US$784 million in the same period of last year, while same-store sales decreased by 6.8% year-on-year, but the Chinese market continues. The strong performance of the quarter, with a year-on-year increase of up to 35%, is one of the best. COACH's approach to the rescue of the market is to force men and footwear to transform into lifestyle brands.
Michael Kors seems to foresee the bottleneck of the future development, because the current growth also shows signs of lack of growth. Compared with the third-quarter net profit growth of nearly three times as of March 30 this year, the current growth rate is obvious. Slow down.
It was then reported that Michael Kors may increase the number of types of beauty products sold, and that a range of products such as cosmetics, skin care products, and perfumes will be launched in full. And according to the senior vice president of Estee Lauder International, Michael Kors's beauty products will be sold exclusively for 660 stores in the US department store Macys. The global retail outlet is Michael Kors’ independent retail store. Market participants expect Michael Kors's worldwide first-year sales of beauty products to reach US$80 million or more.
Compared with the big luxury brands that entered China more than a decade ago, the development of cutting edge luxury into China will be faster, which means that light luxury will have a shorter time from rapid growth to weak growth.
Zhou Ting thinks that the growth logic of old-fashioned luxury goods and light luxury goods is different: “The old luxury brands can grow quickly thanks to the strong consumer demand for luxury goods, which drives the development of these brands. It is not their success as brands. But the market gave them this performance. But these light luxury brands are actively taking the market, and they are very active in opening up stores and markets."
For the future development of light luxury, Zhou Ting is not optimistic, first, because the rapid growth of light luxury is mostly due to the results of the large number of store sales leading to performance growth, and even more than 70 stores can be opened in a year. The second is that compared to big-name luxury goods, consumers of light luxury goods are less sticky. Consumers like Kate Spade today and may like Michael Kors tomorrow. They are not sustainable. Big-name luxury goods will maintain the core customers, but light luxury brands will not maintain customers. They are pursuing the concept of light luxury, taking the fashion road, and need more consumers and more sales.
“I think its current scenery does not represent future prospects, but that the more you go forward, the greater the pressure on the market. But the market capacity will expand and the competition between brands will become increasingly fierce because there are more and more Designer brands and fashion brands entered the field and competed to share market share." Zhou Ting told the Weekly Money reporter.