Meet Michael Kors, a man for all seasons

A fashion school dropout, Kors has gone from success to bankruptcy and back

Few would have heard of 58-year-old Michael Kors outside of the US despite his success as a designer, reality TV star and businessman until this week. Michael Kors Holdings, founded in 1981 by the designer, now honorary chairman and chief creative officer of his company, was happy being an affordable luxury retailer, peddling handbags, watches, shoes and clothes for the price-conscious, till the retail meltdown in its home market hit sales.

On Tuesday, the company, whose annual revenue is nearly $5 billion, declared the start of a new strategy with the $1.2-billion acquisition of high-end shoe label Jimmy Choo. Kors, a fashion school dropout and designer for over three decades, demonstrated that he could stay relevant at all times with this acquisition. The high-end shoe buy brings vitality to the fashion house and also opens up avenues of growth outside of its core market of affordable luxury.

“Jimmy Choo is an iconic premier luxury brand and offers distinctive footwear, handbags and other accessories. We admire the glamourous style and trend-setting nature of Jimmy Choo designs,” Kors said about the acquisition.

At the heart of the buy though is a trend that is likely to change the face of the fashion business in the years to come: Of affordable luxury brands wooing high-end luxury labels as thrifty consumers avoid visiting malls and department stores, choosing to shop online instead. Never before, say experts, have retailers such as Michael Kors, which have catered for long to a middle-class audience seeking trendy but affordable products, felt the pinch of a meltdown as they now do. 

In May this year, the company said it was shutting down 100 to 125 stores in the US as sales continued to fall across outlets. The closure represented 15 per cent of its roughly 837 stores in the home market, hardly boding well for the brand.

The emergence of Michael Kors and one of its key rivals, Coach, on the global fashion map via acquisitions lends heft to the premise that the scales in the fashion business are tilting rapidly. Currently, it is the European luxury groups such as LVMH Moët Hennessy Louis Vuitton, Kering and Richemont that call the shots in the global fashion industry. But that could change with New-York-based retailers Coach and Michael Kors making a beeline for snooty Parisian and London brands.

John D Idol, chairman and chief executive officer, Michael Kors Holdings, said the Jimmy Choo acquisition was the beginning of a new journey at the fashion house. This includes building a luxury group that is focused on international fashion labels that have “some size, scale and heritage”. More affordable luxury brands are expected to follow in Michael Kors’ footsteps following the Jimmy Choo acquisition. 

The fashion designer, who shot to fame for his tryst as a juror on reality TV show, Project Runway, between 2004 and 2012, has been a trailblazer all along. Michael Kors Holdings was launched within four years of the designer turning professional, not very common in the fashion industry, known for its cut-throat competition and subjective likes and dislikes.

How Kors got there is a story in itself. After dropping out of the Fashion Institute of Technology, New York, in the late 1970s, Kors began working as a salesman at a boutique on Fifth Avenue, New York’s most popular retail destination. He began designing clothes soon after at a boutique called Lothar’s, and was noticed by the management of Bergdorf Goodman, a large department store on Fifth Avenue. He was picked up by them to design clothes for the store —his simple, elegant creations ensuring the cash registers kept ringing there. 

Kors hasn’t looked back since then, despite a rollercoaster ride as an entrepreneur. He has gone from being a successful women’s as well as men’s fashion designer to bankruptcy in 1993 and back. His second stint as an entrepreneur saw him promote a lower-priced apparel line under his name as well as design clothes for French house Celine to derisk himself from the vagaries of the retail business.

Kors clients have included Michelle Obama, Melania Trump, the current first lady, and Ivanka Trump, daughter of US president Donald Trump. Kors also counts actress Angeline Jolie, singer Jennifer Lopez and model Heidi Klum among his customers.