The encyclopedia · Marketing & Brand · Marketing decision · 2017
Michael Kors grew too fast and diluted its brand — 'accessible luxury' became mass market
The king of 'accessible luxury' opened too many stores and discounted too much. The brand lost its cachet and was forced to close stores.
Michael Kors · Capri Holdings · 2017-01
What happened
Michael Kors was the defining brand of 'accessible luxury' in the 2010s — handbags and accessories with a luxury sheen at a price that aspirational shoppers could reach. It grew explosively, opening store after store and becoming one of the most visible brands in malls across America.
But the brand grew too fast. Michael Kors opened too many stores, expanded too aggressively into outlets, and discounted too heavily, making its products ubiquitous. The result was brand dilution: the 'accessible luxury' that had made it desirable became mass-market, and the cachet that justified the price eroded. As one analyst put it, the brand became a victim of its own success.
Sales fell, same-store sales declined, and Michael Kors was forced to close stores and pull back from discounting. The company later acquired Versace and Jimmy Choo and rebranded its parent as Capri Holdings, an attempt to rebuild a portfolio of true luxury brands. Michael Kors became a cautionary tale about how a luxury brand can dilute itself by chasing growth too aggressively.
Why it happened
- Michael Kors grew explosively by opening too many stores and expanding aggressively into outlets, making its products ubiquitous.
- Heavy discounting made the 'accessible luxury' brand mass-market, eroding the cachet that justified its price.
- The brand became a victim of its own success: ubiquity destroyed the exclusivity that made it desirable.
- Sales fell and Michael Kors was forced to close stores and pull back from discounting, later acquiring Versace and Jimmy Choo to rebuild.
The lesson
A luxury brand's value is its exclusivity, and exclusivity is destroyed by ubiquity. A brand that chases growth by making its products everywhere destroys the very cachet that justifies its price.
Aftermath
Michael Kors's brand dilution was a landmark case in how a luxury brand can destroy its own cachet by chasing growth too aggressively. The brand closed stores, pulled back from discounting, and its parent acquired Versace and Jimmy Choo and rebranded as Capri Holdings to rebuild a portfolio of true luxury brands. The lesson is durable: a luxury brand's value is its exclusivity, and a brand that makes itself ubiquitous to chase growth destroys the exclusivity that justifies its price — a lesson every luxury brand must learn, and relearn.
Sources
- Michael Kors — Wikipedia (accessible luxury, brand dilution, Capri Holdings)
- Michael Kors and the luxury decline — WWD
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