WHO BOUGHT JIMMY CHOO?! - TheOdyssey.com
Yes, I was alarmed and dumbfounded too, until I read a couple of articles. On July 25th, I was on Twitter and happened to click the explore tab, which I rarely do to check for news or what's new in the media. The largest story regarded Michael Kors buying Jimmy Choo for $1.2 Billion. My first thoughts were "WHAT! WHY?! THIS DOESN'T EVEN MAKE SENSE." Michael Kors targets a middle-class market and Jimmy Choo is a renowned luxury brand. I was thinking the same thing, "How can MK buy a brand from a completely different price bracket?" I don't know all the logistics but I assume MK's focus was on rebranding and the company would obviously need money to do so.
After scrolling through a few articles on NYTimes, this was the reason, Michael Kors sales were plummeting. In my particular demographic, almost everyone has an MK bag. I stated before that they target the middle class but technically, MK is a masstige brand. This is a brand who provides luxury and quality and makes it more affordable and attainable (for the masses but also prestigious). Because of this, I never saw the company as true luxury. There are exclusive luxury brands like Balenciaga and then there's affordable luxury such as MK. See the difference? What I didn't realize before I read the article was that because the company has an abundance of outlet stores, which discount the prices significantly, customers are opting to buy merchandise at cheaper price points as opposed to paying the original price for items. I never held MK to true luxury standards but this is understandable, who doesn't like a sale?
Consumers preferred to shop these low prices and this is why their profits suffered the most. As a result, they closed 100 of their 125 stores. The company turned to rebranding and sought to tap into luxury brands as a way to expand their target markets and combat their loss in sales. While I would rather the company not have done so, I don't think these companies complement each other at all, however, I do understand the reasoning behind this. It's logical, it makes sense and it's a good business move. Not only that, this isn't the only company who made a move like this. According to New York Times, Coach bought Kate Spade for $2.4 Billion. It states that Coach and MK are in a "Luxury Arms Race" with each other, I love seeing this type of competition with brands. Naturally, I'm drawn to neither Coach nor MK while shopping, with exceptions to some MK products. I'm more impressed with their competitors such as Ralph Lauren or Calvin Klein whose designs portray a more luxe aesthetic, which is what these brands are seeking. I could be part of the market they desire to integrate to drive their conversion rates through the roof. With all things considered, I'm looking forward to seeing the reinvented collections by these giants and watching how consumers respond to this change.