Since the beginning of the year, I’ve noticed that one designer in particular is doing extremely well. In a time where high end retailers are slowly but surly fading, business for him seems to be thriving. Who am I talking about? Michael Kors; He is opening up stores in all the major parts of the world;Spain,China,Japan and of course New York.  How does he do it? Could it be that he’s taking advantage of the slow economy by nabbing retail locations at a steal of a price? Could it be that he practiced patients, and struck when the pan was hot? What I think he’s trying to do is dominate the high-end retail arena by placing a store in every mall and every country, no matter where. I worry about his strategy though. Consumers don’t like over saturation. If he makes his product too “available” then people are going to shy away from it. Let’s face it, shoppers love exclusivity. The most appealing thing about high end fashion is the fact that not everyone can get it. That’s what makes Gucci, Prada, and Louis so glamorous. Opening too many stores can hurt your brand status and pockets. When you factor in store maintenance, electricity, employees, etc. that alone can be pretty pricy. It’s not like forever 21 where people are constantly shopping and buying something everyday. With high end fashion the price makes up for the lack of frequency. It would probably take forever 21 a whole day to profit $2000, but high end retailers could make that in 1 hour by selling one bag. Anyway, Michael Kors strategy could either boost profitability, or water down the label. Based on my experience in fashion marketing, I would have never advised him to open up so many stores and here is why.

The world is moving more toward e-commerce. Countries like India and China have a rapidly growing middle class due to outsourcing and import/export. Nearly 40 percent of China’s online businesses are geared towards fashion, with a population growth rate between 28 and 32 percent a year. Michael Kors biggest flagship store is in China. Why didn’t he just create an exclusive online boutique for the Chinese market? That would have been a lot more cost savvy, since it cost a boat load of money to get a retail spot, pass import tax laws, and hire a marketing/PR team inChina! Brick and Mortar stores are not really necessary internationally. What Michael Kors should have done is invested money in a rock solid e-commerce strategy. People are shopping online more now than ever! Brands like Talbot’s, Gap, Abercrombie and Fitch, and Cold Water Creek have had to make cut backs due to too many stores opening, (check the article here). To me, Michael Kors is just flexing his brands muscles. The rule of thumb for any business is to not spend money if you don’t have to. In the case of high-end retail, less is more! This greedy marketing approach is not a good look. Regardless, the year is looking good for MK brand because sales profits have increased due to the new store openings. Store openings usually raise profit temporarily anyway. I believe in longevity. Companies should make moves that count for the long haul.

What do you think about Michael Kors methods of expanding his brand? Do you agree or disagree? Comment Below

Also check out this article in Woman’s Wear Daily called Where Clicks Beats Bricks. The article explains why opting for brick and mortar in China is unnecessary. It’s pretty interesting.