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    Has The Light Luxury Brand Collapsed Or Needs A Revolution?

    2016/11/5 12:22:00 72

    CoachKatespadeBrand

    On Tuesday and Wednesday's two conference calls,

    Coach

    and

    KateSpade

    The latest quarterly report has been released.

    In the first 2017 months of fiscal year, the former increased 21.8% to 117 million 400 thousand dollars, and net sales increased by 0.7%.

    In the third quarter of fiscal year 2016, net sales increased by 14.1% to $316 million 500 thousand and retail sales increased by 6.7%.

    Also in "

    brand

    Ralph Lauren and Michael Kors, which have struggled for a long time in the image diluted "mire", are also good.

    According to the report, although the specific earnings figures will not be released until next week, the brand leader has revealed the quality of sales promotion in the previous conference call.

     Light luxury brand

    Coach19412016 spring and summer

     Light luxury brand

    KateSpade, 2016 autumn and winter

    Many people still remember the time when these four brands came to life before 2014.

    Unlike Dior, Chanel, Hermes and other old European luxury goods that still held "high cold" and emphasized the craft tradition at that time, these American brands started a shorter time (the oldest Coach was founded in 1941), and the slogan of "affordable luxury" (affordableluxury) came out as soon as they were born.

    In the performance growth stage, their channel strategy is more radical. Among them, the fastest expanding MichaelKors has 2913 sales outlets in the world in 2013, and has increased to 4133 by July 2015.

    One of the reasons for opening up so many stores is that they have opened up a large number of sub lines, while supplying high-end department stores, mid market and discount outlets to cover as many audiences as possible.

    Take RalphLauren as an example, its flag brands can hardly be read in one breath: Ralph Lauren Collection, Ralph Lauren Purple Label, Polo Ralph Lauren, Polo, Ralph, Ralph, and so on.

    "As long as the brand is divided, the low-end line and the high-end line will not interact with each other."

    This view is completely wrong after that.

    The actual situation is that the same brand's low-end line and high-end line have become mutually competitive relations.

    Ordinary consumers will think: "if you can buy cheaper versions in Ortles, why spend a lot of money to department stores?" the high-end market consumers lose loyalty to the brand because of the flaunt brand Logo, after all, for them, the consumer brand is also a consumer identity.

    Another problem is that after a large number of department stores are settled, brand channel marketing strategy will have to be affected by the latter.

    The extensive expansion of these extravagant brands has made them more and more bound up with the rise and fall of the US Department stores. The latter have almost no longer been able to survive in the past few years. They have been hit by the decrease in e-commerce and overseas tourists, and have to choose to attract people through discounts.

    "Of course, you can insist on a positive price in your own store, but it is very difficult for a department store to discount it."

    Natalie Kotlyar, a partner of BDO, a consultancy, told Bloomberg.

    For the three brands of Coach, Michael Kors and Kate Spade, the once favored bag market has also slowed down since 2013.

    According to Barclays Bank, the market for high-end leather goods and accessories in the United States increased from 16%, 11% and 8% to 3% in 2012 to 2015.

    "Brands, shops and space are increasing, but they are chasing the consumer demand that has been shrinking."

    Neil Saunders, director of consumer research firm Conlumino, said.

     Light luxury brand

    The discount rate of us major department stores is Saks, Bergdorf, Neiman Marcus, Barneys, Bloomingdale's and Nordstrom from left to right respectively.

     Light luxury brand

    10 brands with the biggest discount, among which Michael Kors Collection, MMK and Ralph Lauren are second, eighth, ninth.

     Light luxury brand

    On the left is the change in the annual growth rate of the high-end bag industry. The right picture is the change in the market share of bags in the United States.

    {page_break}

    These brands have taken a long time to restore their image, and their strategies are very similar.

    Coach and KateSpade chose to pform into lifestyle brands in 2013 and 2015, adding new products such as shoes, men's clothing and even home.

    They believe that this helps to increase the contact between brands and new consumers.

    Coach has also set up a high-end product line Coach1941.

    At Tuesday's earnings conference, CoachCEOVictorLuis pointed out that the product line is "very good at operation, and has a growing proportion in store outlets."

    In terms of channels, these brands also become more powerful. While closing some stores, they also begin to withdraw from department stores' discount activities and sell goods at a positive price.

    Ralph Lauren's Way Forward Plan is the case, and Michael KorsCEO Stefan Larsson formally joined the twenty-third Goldman Sachs Global Retail conference in September. In order to restore the brand's pricing structure, the brand will no longer participate in the department store's friends and family feedback and coupons marketing activities from February 1st onwards.

    Kate Spade CEO Craig Leavitt said in an interview on Wednesday that the brand will also directly avoid any existing promotional discounts when expanding new stores in the future.

    "We have to establish contacts with customers at full price from the very beginning.

    This is closely related to the brand health of KateSpade. "

    "The current situation of department stores also does not allow them to resist anything.

    10 years ago, they only knew expansion, expansion and expansion, but now the situation is very difficult. They also want to find ways to make profits, and do not want to damage the relationship with the brand.

    They are clear that labor pains are necessary.

    Fashion retail consulting firm Gabriella Santaniello said.

    Restoring old image is more difficult than building a new image.

    Fortunately, the change has begun and is working.

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