As Christmas is coming, light luxury brand—Michael Kors, starts its crazy sales at large discount. It is worth mentioning that it is the first time Michael Kors’ quarter sales reduce. Some experts believe that it cannot last long to increase the sales by large discount. On the contrary, customers will doubt the brand value.
Recently, journalists of Beijing Business Today visit the Michael Kors stores, and find all the Michael Kors products are in discounts from 30% off to 70% off, including the bags and watches. The sales person introduces that it is the Christmas promotion, and that the products in discount are the latest and most of this year.
The market of luxury brand is slumping these years. Although Michael Kors is top in sales for the past five years, it is also deeply impacted by the market. It is the first time that Michael Kors’ quarter sales reduce since 2011. What’s more, its competitor Coach has surpassed.
According to the data, Michael Kors’ net profit reduces by 15.7%, at 0.1471 billion dollars in the first quarter of 2017. In the second quarter of 2017, its total revenue reduces by 3.7%, at 1.09 billion dollars. What we need to pay attention is that in the second quarter, Michael Kors increases rapidly in the Asian-Pacific market but in fact, its less than 0.1-billion revenue contributes little to Michael Kors. The main increase is brought by its 137 new stores which MK just takes back the attorney. In the forth quarter of 2016, MK only increased 10.9% in its sales.
The downturn drives Michael Kors to increase its sales by discount. John D. Idol, CEO of Michael Kors, admits that the over discount will affect the whole group, and that the discount promotion activities will be decreased from next Feb..
In fact, Michael Kors, as light luxury brand, is positioned as neither luxury nor popular customer goods. The embarrassing position affects the royalty of its customers.
Zhou Ting, the dean of the wealth quality research institute, indicates Michael Kors’ special discount to increase its sales will lower not only its image but also its customers. Although Michael Kors can clean its inventory in short term, it won’t last long. If MK wants to win in the market, the creativity and its design are the key.