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.
In July 25, 2017, Michael Kors announced the acquisition of luxury brand Jimmy Choo at a price of US $1 billion 200 million. After the transaction, Jimmy Choo became a wholly owned subsidiary of Michael Kors. The acquisition has enabled Michael Kors to gain new growth momentum in the weak core business growth.