Blown off Kors ?

It's a Friday afternoon and I'm writing this during lunch in the Hofbräuhaus in Munich for two reasons; (1) it makes be feel slightly less guilty for finishing the working week a little early and (2) I can't think of a better place to write about ubiquity.

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The last couple of days has seen the share price of Michael Kors plummet on the back of a very poor fourth quarter and a 7% decline in like-for-like sales in North America. 

The poor performance has been accompanied by a litany of factors.   It always amazes me that brands always quick to blame everything from bad weather to the price of oil on poor performance but never their own actions.   It's up to a CEO to factor in resilience and plan growth in a way which is sustainable.

Alas Micheal Kors looks like its running a sprint and not a marathon.  That works in the short term but in the world of luxury it is not a recipe for success.     Luxury brands are more than a high price point and an aggressive expansion of retail points.  Ubiquity works for Starbucks but it doesn't sustain or nourish a luxury seller of accessories.

Simple put, Kors has expanded their retail footprint faster than they have grown their intrinsic equity.   A popularity which is a mile wide and an inch deep.   Sooner or later, usually sooner, something else will come along and steal the crown.

Im currently reading Jean-Noel Kapferer's latest book 'How Luxury Brands Can Grow Yet Remain Rare".  No surprises but essential reading which helps make the point that this is a critical subject for a brand owner. Kapferer rightly places Kors into the "masstige' business model.   As he puts it "luxury for all".   Only luxury can't be accessible to everyone.  It can't be on every street corner, especially when it's based on a giant MK logo which identifies the provenance.   If you're going to ape Louis Vuitton then have the price points to match.

I suspect there is more pain coming on this brand.    Which is why my money is betting on the Hofbräuhaus not selling out to become a Michael Kors boutique anytime soon.