Designer Highlights the Challenge of Staying Relevant in an Era Driven by Social Media Trends and Consumer Preferences
NEW YORK CITY — In a federal courtroom on Monday, renowned fashion designer Michael Kors addressed the complex challenge of maintaining brand relevance in a landscape where trends can swiftly shift due to viral TikTok videos and celebrity endorsements from icons like Taylor Swift and Beyoncé.
Kors’s testimony launched a pivotal week in the antitrust trial concerning the Federal Trade Commission’s (FTC) efforts to block Tapestry’s proposed $8.5 billion acquisition of Capri Holdings. This merger would unite six prestigious fashion brands under one umbrella: Tapestry’s Coach, Kate Spade, and Stuart Weitzman alongside Capri’s Versace, Jimmy Choo, and Michael Kors.
As the founder and chief creative director of his eponymous brand since 1981, Kors shared insights into the cyclical nature of fashion trends. “Sometimes you’ll be the hottest thing on the block,” he noted. “Sometimes you’ll be lukewarm. Sometimes you’ll be cold.” His candid reflection underscored the reality that even established brands like Michael Kors can face periods of diminished consumer interest.
Kors acknowledged the current state of his label, admitting, “I think we’ve reached the point of brand fatigue,” emphasizing the need for a refresh. The FTC has contended that a merger of these companies could result in a powerful handbag conglomerate capable of raising prices while delivering inferior products.
In contrast, attorneys representing Tapestry and Capri questioned the FTC’s depiction of a consolidated handbag market. They argued that competition has diversified, with consumers increasingly gravitating towards both luxury and affordable fast-fashion options, alongside online-only platforms and secondhand marketplaces.
The timing of the trial is critical, as consumers express hesitance towards high prices, and the outcome could be influenced by the closely watched U.S. presidential election. This scrutiny comes as Capri’s shares, which include the Michael Kors brand, have reflected the struggles described by Kors; as of Monday afternoon, the company’s stock had plummeted nearly 24% this year—trailing the S&P 500’s 18% gains and Tapestry’s 17% rise.
In the most recent fiscal quarter ending in late June, Michael Kors reported a revenue decline of 14.2% on a reported basis, or 13.3% when adjusted for constant currency, compared to the previous year. Despite these challenges, Kors remains an astute observer of the fashion industry. He draws inspiration from spending time in stores, engaging with customers, and people-watching in bustling public spaces.
His adaptability is evident; for instance, he discovered the newcomer handbag brand Aupen after seeing Taylor Swift with one of its bags. When he attempted to visit the company’s website, it crashed—a testament to the influence of celebrity endorsements. “It shows you the power of women like this,” he remarked.
In another testimony on Monday, former Macy’s CEO Jeff Gennette shared insights about the repercussions of declining brand appeal. He revealed that the department store’s sales were negatively impacted by an over-reliance on Michael Kors’ products, noting that markdowns on Kors handbags contributed to a troubling sales spiral during his tenure.
The antitrust trial is set to conclude on Tuesday, with economists from both the FTC and the companies scheduled to testify. As Kors and other industry leaders navigate these turbulent waters, the outcome may reshape the landscape of luxury fashion, influencing how brands adapt to the ever-evolving market demands.
