NEW YORK, United States — Michael Kors isn't just for grownups. The fashion line known for posh handbags and its signature MK print turns out to have an enormous teenage fanbase.
The teenage glamour of the Michael Kors label outshines all other handbag brands, according to a semi-annual teen survey released this week by Piper Jaffray. In fact, the brand has reached new highs: 39 percent of average-income girls choose Kors as their preferred handbag label, up from just 7 percent in a 2012 survey. Rival handbag maker Coach fell from 46 percent to 17 percent in the same period.
The bad news for Coach is that the power of teen shoppers far exceed their spending. Teens are highly influenced by other consumers, making the demographic an important indicator, and young shoppers become an influential force once they pick up on something. Erinn Murphy, an analyst at Piper Jaffray, looks at teen shopping habits as a way to determine which brands are coming in or out of favor.
Coach's satchels, duffels, and crossbody bags long dominated the market for "affordable luxury," fancy goods that don't carry the sky-high price tags of true luxury brands like Chanel and Hermès. Now in a deep slump, the company in the early stages of a revamp that includes new marketing campaigns and overhauls of its stores and merchandise. Coach brought on Stuart Vevers, a veteran of several European luxury labels, as executive creative director in 2013.
In an effort to curb its own ubiquity and bolster its cachet, Coach is also reducing discounts. Its handbags won't be able to recapture teens until after addressing the core customer— an older, more affluent crowd. "You're just not seeing that turn yet with the teens," says Murphy. "They're still looking at Michael Kors."
Yet Kors, for all its power and prominence, isn't safe either. Alarms of Kors becoming too ubiquitous—like Coach once did—have rang as sales slowed in the past year. Among teens, Kors is reaching territory once inhabited by Coach as the overwhelming favorite. This position proved unsustainable for Coach, pulling the company back down to earth.
A cohort of hard-charging upstarts is pushing for expansion, threatening both incumbents. "My guess is that it'll be hard to sustain at this level," Murphy says of Kors's popularity. "You have brands like Tory Burch coming up. You have brands like Kate Spade coming up."
A representative for Coach declined to comment, citing its quiet period before an earnings announcement. A representative for Michael Kors did not respond to a request for comment.
By: Kim Bhasin, editor: Katie Drummond.