The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
The owner of Michael Kors and Jimmy Choo says prices at both brands will increase during the coming months as the company eschews the major discounts that have dinged revenue in the past.
“We’re raising prices on Michael Kors,” said John D. Idol, chief executive officer of Capri Holdings Ltd., which also owns Versace. “We’re going to raise prices again for spring season next year — prices are going to go up considerably. And also at Jimmy Choo.”
The topic is a sensitive one for luxury companies: Kors and rival brands like Coach and Kate Spade are trying to raise the prices of their handbags and accessories as they wean themselves off discounts and promotions, which boosted volume but eroded revenue and profitability in past years. Selling merchandise at full price is seen as the hallmark of a high-end brand.
“Michael Kors over the last several years has been working to re-elevate their brand and retrain their customers that they don’t need to be everything to everyone,” said Simeon Siegel, managing director at BMO Capital Markets. “That’s been the turning point for this brand.”
Capri shares surged as much as 16 percent — the most since November — on Friday after the company boosted its revenue forecast and posted sales that exceeded analysts’ projections.
Idol told analysts during the call that Capri had no plans for major discounts.
“I don’t care if our competitors do it — it doesn’t matter. We don’t have the inventory to do it. So it won’t happen,” he said. “And not only that — we just don’t want to do it anymore.”
Capri reported net inventory of $760 million as of June 26, a 20 percent decrease compared to the prior year.
Luxury companies are benefiting as consumers continue to splurge after squirrelling away savings during the pandemic.
Still, Idol was broadly cautious given the uncertainty about new Covid-19 infections.
“The delta variant is spreading, and so I think that will probably slow down some of our expectations around rebounding as quickly as we would have liked to have seen,” he said. “But on the other hand, we see North America going much quicker than we’ve seen. We see strength in China.”
Learn more:
How Michael Kors Became New York Fashion’s Ultimate Entertainer
He couldn’t sing, he couldn’t dance, but from Studio 54 to Broadway to Seventh Avenue, he designed his way into a 40-year success story.
From analysis of the global fashion and beauty industries to career and personal advice, BoF’s founder and CEO, Imran Amed, will be answering your questions on Sunday, February 18, 2024 during London Fashion Week.
The State of Fashion 2024 breaks down the 10 themes that will define the industry in the year ahead.
Imran Amed reviews the most important fashion stories of the year and shares his predictions on what this means for the industry in 2024.
After three days of inspiring talks, guests closed out BoF’s gathering for big thinkers with a black tie gala followed by an intimate performance from Rita Ora — guest starring Billy Porter.