In a federal courtroom on Monday, storied fashion designer Michael Kors spoke about the steep challenge of staying relevant in a world where brands can rise and fall based on viral TikTok videos and photos of handbags on the arms of celebrities such as Taylor Swift and Beyonc\u00e9.<\/p>\n
Kors kicked off the week of testimony in the antitrust trial in Manhattan as a Federal Trade Commission lawsuit\u00a0seeks to block\u00a0Tapestry\u2019s $8.5 billion acquisition of\u00a0Capri.\u00a0The deal, if approved, would put six fashion brands under a single company: Tapestry\u2019s Coach, Kate Spade and Stuart Weitzman, with Capri\u2019s Versace, Jimmy Choo and Michael Kors.\u00a0<\/p>\n
The FTC on Monday called Kors, who founded his namesake brand in 1981 at age 22 and still serves as its chief creative director, to testify. Yet, in his remarks, Kors described how even legacy brands like his own can struggle and lose shoppers\u2019 interest.<\/p>\n
\u201cSometimes you\u2019ll be the hottest thing on the block,\u201d he said. \u201cSometimes you\u2019ll be lukewarm. Sometimes you\u2019ll be cold.\u201d<\/p>\n
He acknowledged that his namesake label has fallen from favor and needs a refresh.<\/p>\n
\u201cI think we\u2019ve reached the point of brand fatigue,\u201d he said.<\/p>\n
The FTC\u00a0has argued\u00a0that the combined companies, particularly with Coach and Michael Kors under the same owner, would create a bag behemoth with the power to hike prices for customers while offering them the same or worse products.<\/p>\n
Attorneys for Tapestry and Capri, on the other hand, have questioned the FTC\u2019s depictions of a consolidated handbag market. They have said competition has grown as customers consider both pricier luxury brands and lower-priced fast-fashion names, and can shop from online-only platforms and secondhand marketplaces.<\/p>\n
The trial comes as consumers balk at high prices and when the outcome of the closely watched U.S. presidential election could change the federal agency\u2019s strategy.<\/p>\n
Shares of Capri, which includes Michael Kors, reflect the tougher stretch that the designer Kors described. As of Monday afternoon, the company\u2019s stock has fallen about 24% so far this year. That trails far behind the roughly 18% gains of the\u00a0S&P 500\u00a0and the approximately 17% rise of Tapestry.<\/p>\n
In its most-recent fiscal quarter that ended in late June, Michael Kors\u2019 revenue dropped 14.2% on a reported basis or 13.3% on a constant currency basis compared to the year-ago period.<\/p>\n
Kors said he remains a student of the fashion industry and draws inspiration from spending time on store floors, talking to customers or people-watching at places such as airports. Even as an industry veteran, he said he must move nimbly.<\/p>\n
For instance, he said he learned about Aupen, a handbag industry newcomer, when he saw a photo of Taylor Swift carrying one of the company\u2019s handbags. When he went to the company\u2019s website, it crashed, he said.<\/p>\n
\u201cIt shows you the power of women like this,\u201d he said.<\/p>\n
In another testimony on Monday, former\u00a0Macy\u2019s\u00a0CEO Jeff Gennette said retailers also feel it when brands lose some of their shine. Gennette, who\u00a0retired early this year, said the department store\u2019s sales got hit because it leaned too heavily on Michael Kors\u2019 brand. He said the markdown of Michael Kors\u2019 handbags contributed to \u201ca bad spiral Macy\u2019s was living through when I was there.\u201d<\/p>\n
The antitrust trial is expected to conclude on Tuesday with testimony by economists, including one for the FTC and one for the companies.<\/p>\n<\/p>\n
In a federal courtroom on Monday, storied fashion designer Michael Kors spoke about the steep challenge of staying relevant in a world where brands can rise and fall based on viral TikTok videos and photos of handbags on the arms of celebrities such as Taylor Swift and Beyonc\u00e9. Kors kicked off the week of testimony […]<\/p>\n","protected":false},"author":0,"featured_media":9688,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-9687","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/9687","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=9687"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/9687\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/9688"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=9687"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=9687"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=9687"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}