[ad_1]
The $ 2.1 billion acquisition of Versace by Michael Kors Holdings Limited, announced this morning, has generated an immediate response from consumers, largely negative. Any changes to a beloved brand can only trigger reactions on Twitter, of course, but in this case, many of these consumers have asked the critical question that Capri Holdings Limited, the new corporate name of the combined brands, will have to confront: Will the acquisition benefit Kors at the expense of Versace?
A lot seems to think so. "We know that Gianni did not die for that," tweeted Scott Timlin, a former MTV star, referring to the murder of the designer in 1997 by a fan of mental disorders. The essential objection stems from the fact that, while both brands are technically in the luxury category, Michael Kors is what some call "masstige" (prestige for the mass market), while Versace is a renowned Italian fashion house. . and the prices to match. "It's time to have Versace at TJ MAXX and Marshall," tweeted freelance writer Danielle Ayoka.
"It's super disgusting and sad even," complained Walter Miller, who co-starred on VH1's Black Ink Crew.
Criticism hurts – but this criticism has historical bases.
Ten years ago, Michael Kors was a fashionable brand. His sophisticated but accessible sportswear and accessories flew out of department store shelves. "Michael is shooting at full speed," Macy's CEO Terry Lundgren told the New York Times in 2008. "This is his moment."
Unfortunately, Kors did too much of his time, starting a phase of expansion that put his clothes in discount stores and quickly diluted his brand. Nowhere was this dilution more visible than the Kors handbags, which in their omnipresence have gained the luxury reputation for the Subaru-mom suburban ensemble. "Michael Kors handbags are everywhere," the Washington Post said in 2015, "and that's a problem."
In May of last year, Michael Kors braked, closed 125 stores and reduced promotions that had tainted his image of luxury in the minds of many consumers.
So now comes the acquisition of Versace and, with it, the many people who fear that Kors will reduce the Italian brand to the level that Kors currently holds. The purchase of a house like Versace – launched in 1978 when the late designer Gianni Versace presented his first clothes in Milan – has obvious advantages for Kors, which plans to develop the brand's marketing, 200 at 300 and increase his income. at $ 2 billion. But will Versace lose its splendor under the ownership of Kors?
Bob Phibbs, CEO of New York-based consulting firm Retail Doctor, does not think so. Kors – who has already been on a recovery track – "knows his customers and strategically collects brands like Versace instead of fragmenting," he said. "They know that luxury brands want to create a feeling and make buyers feel that they are important. When the company got fed up with discounts in department stores a few years ago, they started to discount them from their strategy. Michael Kors pointed out that you can not discount luxury. They are a premium brand investing wisely. "
It should be noted that the mass-market companies with a rarefied luxury brand are not new. Although many consumers are unaware of it, Volkswagen owns Bentley, for example. The cruise carnival, cheap for cruises, has the legendary Cunard line. Gray Goose vodka is a property of Bacardi Limited, and so on.
The difference here is that the purchase of Versace by Kors is very public and very visible, and many consumers are very dissatisfied. Fashion is capricious and Versace could prove to be worse because of the wear and tear of this case.
"The acquisition of Versace by Micheal Kors is an important departure for this company and, according to the management of the Versace brand, could pose a risk to Versace's loyal customers," said Bruce Winder, co-founder and partner Retail Advisors Network. . "Michael Kors has been a little bit buying Jimmy Choo [for $1.2 billion in July of 2017.] But what makes a successful business in the market (MK) is perhaps not what makes a successful business in the high-end market. The industry has been consolidating lately, but sometimes it's a problem for brands because their DNA is being transformed, intentionally or not, into something too different.
[ad_2]
Source link
