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Why Is The Luxury Brand Always Sold By &#34, Selling &#34?

2016/12/30 10:08:00 30

BrandKate SpadeCoach

 Kate Spade

Light extravagance

brand

Sold repeatedly, this time it was the first time.

Kate Spade

According to the world clothing and shoe net, light luxury brand Kate Spade is seeking sale under the pressure of radical shareholders.

The ailing Kate Spade has been sold twice in the past two months.

In November, one of the company's shareholders, Caerus Investors, New York hedge fund, said in an open letter that it hoped Kate Spade would sell publicly.

Within two years, the share price of Kate Spade has fallen by 63%.

This brand with bright colors and cute and cute girls is now a bit bleak.

According to the world clothing and shoe net, Kate Spade is working with an investment bank and has contacted potential buyers including other retailers.

The sale process of the company is still in its early stage.

Kate Spade declined to comment on this rumor.

Light luxury mode: expansion, expansion and expansion

In the second half of this year, mergers and acquisitions came out in light luxury industries.

There have been rumors that LVMH is planning to acquire Michael Kors, an American luxury brand.

Coach

Or merge with the British luxury brand Burnerry to build a luxury giant worth $20 billion.

The luxury industry seems to be in a big shuffle.

Whether it is MK, Kate Spade or Coach, it all started with the traditional light luxury brand and the expanding route.

In the first two years, a lot of light luxury brands rely on new shops to gain two digit growth. However, the myth performance has not been continued, and it has not been able to escape the fate of a sharp slowdown in growth.

Relying on new stores to support performance is not able to get long-term benefits. Once the expansion period of new stores is over, consumers' enthusiasm for consumption will decline, and the decline in performance will follow closely.

It is hard for light luxury brands to find a balance between maintaining brand superiority and expanding sales channels.

Once a brand becomes accessible, it will inevitably go downhill.

Coach and Michael Kors expanded rapidly after entering the Chinese market. The former even expanded the market with the speed of "opening 30 stores a year".

Kate Spade once made bold rhetoric to expand its global scale and expand itself to become a large retail company with a market value of $4 billion.

However, it has not been achieved today.

 Kate Spade

Another problem that plagus luxury brands is the layout of too many outlets.

Almost all the outlets in the world will see the emergence of some light luxury brands, which are often the most popular ones.

The price of luxury goods is not high, and the discount villages are lower.

For consumers, it costs a hundred yuan to buy a lightweight luxury brand that we all know.

For stores, we can rely on outlets to ensure the number of consumers.

It is understood that the wholesale income of MK has exceeded retail income in the last fiscal year, which means that a larger proportion of revenue is coming from discounted goods or wholesale channels.

Its revenue in discount stores has accounted for about 1/3.

It seems that this is the best of both worlds.

In fact, the more high-end brands are, the less the outlet sales account is, or even zero.

The discount village has seriously affected the pricing strategy of the brand.

Consumers who are cheaply discounted for long periods of time are naturally unwilling to spend two times the price on the brand's full price package.

The discount village created a cheap but high-end look for the brand, but consumers thought it would be so cheap and expensive.

The discount village has deeply hurt the brand retailers stationed in department stores.

In addition to the above two reasons, Zhou Ting, President of the luxury goods field and President of the Institute of wealth quality, thinks that the rise and fall of light luxury brands is related to the quality of products and the ability of product design innovation to keep pace with the expansion.

Many years ago, Coach gave the impression that it had been canvas material, full of brand Logo, and the design behind it had made Coach once out of favor.

MK seems to be in the footsteps of Coach. Every year MK sees the purse and backpack style in the store, and the main ones are always those.

Coach out of the mire and other brands struggling.

There are two rumours of M & A mentioned earlier, but there are still some differences between the two, which reflects the "two fires" of light luxury industries.

MK and Kate Spade will be acquired, while Coach is ambitious to buy other luxury brands.

Two years ago, Coach went to the edge of a precipice, like today's MK and Kate Spade.

However, it is indeed a different fate to be a light luxury brand. Coach has successfully saved itself.

In the two years of pformation, Coach has strongly avoided the development mode of light luxury brands, and has made three reforms in product, store environment and marketing strategy.

Coach pformed its brand positioning from "accessible luxury" to "high-end lifestyle brand" and began to expand garments, shoes and other products.

In fact, changing the brand positioning is a very risky thing. Before attracting new customers, it is likely that some of the old customers will be lost.

Coach has been looking for a balance between the two, and pays more attention to both function and innovation in design and procurement.

The brand has retained some of the past popular products and has been pformed into many fashionable elements, such as rivets, leopard print and so on.

At the same time, remove the past big Logo patterns, and turn the buttons, wrap the edges and labels to reveal the brand.

Since last year, Coach has gradually closed down the discount village in the United States.

Starting in August this year, Coach will withdraw from 250 stores with low passenger traffic, accounting for 1/4 of the total number of stores in the mall, and refurbishment of existing stores.

In addition, Coach will also reduce the intensity of retailers' discount so as to reshape the brand image.

The interesting contrast is that Coach's performance has resumed growth this year, and the Disney x Coach1941 series, which is co operating with The Walt Disney Company, is selling well.

The other two luxury brands are still bogged down in the mire.

Kate Spade has not reached the expected level of profitability, while MK has been "retreated" by some department stores because consumers are losing interest.

In the age of luxury goods and department stores, consumers are beginning to be picky.

After all, like Coach's bottoming out, not everyone can do that.

In the end, if you can only sell yourself, the brilliance of the past will really become a bubble.

More interesting reports, please pay attention to the world clothing shoes and hats net.

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