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?