In January 19th, Michael Kors’s closing share price of $66 per share reached its highest level in 3 years. The group’s valuation returned to $10 billion, more than the British luxury group Burberry, and the market value of Burberry is now 6 billion 800 million pounds (about $9 billion 420 million).
However, since 2014, Michael Kors’s growth in the same store sales has been declining, partly due to the increasing sales of Michael Kors stores and department stores and other sales channels. After the recession, consumers are becoming more sensitive to prices and are keen on discounts. Although 40% discount is a great temptation for consumers, it will become more difficult to maintain brand image. In addition, frequent discount activities make brands less distinctive in the minds of consumers.
In particular, after 2016, John D. Idol, chief executive of Michael Kors, told investors that maintaining the brand image is one of the most important things that the group needs to do. The group is trying to make it easier for the group to get brand goods by reducing sales and removing the sales channels like department stores. This is to relocate the position of its own high-end brand retailer.