Thrilling discounts on designer apparel and accessories from Michael Kors, Prada and Gucci are the order of the day. KORSVIP members enjoy access to the latest releases at up to 70% off and a suite of benefits including private styling appointments, birthday rewards and early access to the sales.
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This modern collection, a mix of contemporary and traditional pieces, has become one of the world’s most beloved luxury brands. The eponymous label began as a small line in 1981, but the brand’s reputation has grown significantly since then.
Its success has brought the label to the attention of celebrities, and many VIPs like Gwyneth Paltrow and Jennifer Lopez have praised its stylish bags and other accessories for their quality and unique designs. Its products are sold in a variety of outlets around the world, including in some major US cities and at international airports.
However, despite its ubiquity and growing popularity, the company is experiencing some bumps in the road. The reluctance of some shoppers to pay full price for its products may be one cause of its recent decline. This is a problem because it means the company must resort to cutting prices on its home market, which takes a toll on profits.
Another reason why Michael Kors is struggling to make a profit is its decision to cut back on its wholesale business. The label is reducing the number of items it ships to department stores as it tries to build the pricing power it has lost with shoppers, according to company CEO John Idol.
Moreover, Michael Kors is adamant that it will no longer participate in department stores’ broad-based friends and family sales or accept coupons. This will help the company focus on its retail operations and rebuild its profitability, Idol said on a conference call with investors Thursday.
These moves are part of a broader strategy to rein in costs. It’s also part of a push to recoup some of the pricing power it has lost in its own stores, which were hit by the recession and are now undergoing a slowdown in tourist-dependent sales.
While this isn’t the first time Michael Kors has cut back on its wholesale business, the label’s sagging sales in the first quarter indicate it may be losing ground. The accessories label’s same-store sales slipped 7.4 percent in the first three months of the fiscal year, steeper than the 4.2 percent drop expected by Retail Metrics. on sale michael kors bags