Michael Kors is bringing more excitement to the category where people are buying new handbags, instead of other items like clothing,” Citi analyst Oliver Chen told Reuters.
Designer Michael Kors launched his brand 30 years ago as a luxury sportswear house. Michael Kors Outlet
The company now makes pyramid-studded Saffiano leather handbags, watches and apparel worn by first lady Michelle Obama and celebrities including Jennifer Lopez.
Michael Kors raised $944 million in its initial public offering just over a year ago, one of the biggest ever listings by a U.S. fashion company. The company now has a market capitalization of $12.6 billion.
Kors, well-known for his work as a judge on the long-running television fashion show “Project Runway”, held a 3.7 percent stake in the company as of December 31. At today’s share price, this stake would be worth around $466 million.
Michael Kors Purses
The company, which reported third-quarter results that comfortably beat Wall Street estimates, said the addition of new stores and the conversion of department store premises into branded “shop-in-shops” had drawn in more customers.
A shop-in-shop is a mini-store within a larger department store that houses similar products. In total, there were 388 Michael Kors stores worldwide at the end of the third quarter, the company said.
“It’s the big opportunity for Michael Kors, growing stores, as that means a lot of runway for them to grow for at least two or three more years,” said Chen.
Comparable-store sales rose 41 percent in North America in the October-December holiday quarter, while larger rival Coach said last month same-store sales fell 2 percent in North America, only its third decrease in 11 years.Michael Kors Bags
“They (Michael Kors) are gaining market share from Coach, but it’s not only Coach – it’s also the little guys that are getting squeezed in a highly competitive market,” Morningstar analyst Paul Swinand said.