Accessible Luxury’s Big Opportunity
This week, everyone will be talking about Michael Kors’ 40th anniversary show, Gucci’s first-quarter sales and Fashion Revolution Week.
THE SHRINKING CENTRE
- The brand Michael Kors is marking its 40th anniversary with a digital show on April 20
- “Accessible luxury” brands have lost market share to both more-expensive and cheaper rivals
- Handbags, a key category for these labels, are expected to see strong sales as lockdown restrictions ease
Michael Kors will be getting back to the designer’s roots with its latest collection launch, a New York theatre-themed digital event that doubles as the brand’s 40th anniversary celebration. It’s a time of transition for Kors, and the American accessible luxury category as a whole. The pricey but generally not too pricey brand, along with similarly positioned rivals like Coach and Kate Spade, is competing for a shrinking market, as wealthy consumers upgrade to luxury labels and the masses look for bargains. Piper Sandler’s latest survey of American teens illustrates what Michael Kors is up against: in 2018, 62 percent of respondents named Kors, Coach or Kate Spade as their favourite handbag brand, while 17 percent named a European luxury label. In the latest survey, the gap was much narrower, at 43 percent and 37 percent, respectively. Meanwhile, Shein, an online fast fashion retailer, cracked the survey’s list of most popular handbag brands for the first time.
It’s not all bad news. Kors might be grabbing for a smaller slice of the pie, but the pie itself is bound to get bigger as lockdowns lift and consumers seek out new heels and handbags. The long-awaited new silhouette — goodbye skinny jeans — appears to be gaining broader traction, a prime opportunity for brands that bridge the divide between runway fashion and everyday dressing. New leadership may be on the way, with former Coach head Joshua Schulman rumoured to be in line to head Capri, the parent of Kors, Versace and Jimmy Choo.
The Bottom Line: As Coach’s recent success with “Coach TV” shows, it is still possible for accessible luxury brands to win consumers’ attention. The greater challenge is convincing those customers to buy their bags at full-price boutiques instead of outlet malls and off-price stores.