2 October 2017
Author: Anton Dell
In today’s constantly changing retail environment, many brands must reinvent themselves regularly in order to survive. In this post, we take a closer look at the journeys of two globally successful American brands – Hollister and Michael Kors.
Hollister: From California to the World
In 2011, Hollister sales were at USD $2 billion. The little brother of Abercrombie & Fitch, Hollister had a California-cool image. Stores were decorated to look like beach huts, complete with lifeguard models. The Hollister logo, a seagull, was seen everywhere in malls and high schools all over America. Hollister never needed to advertise or look at how it communicated with its customers.
Then, when sales went down by 20% between 2012 and 2016, Hollister had to think about what it was doing. Logos were not cool anymore. Hollister as a beach brand was not enough.
Sales are up now – what has the brand changed?
The change that is easiest to see is the remodelling of 65 Hollister stores. The beach-hut look has been taken away. Everything is now about connecting with the customer rather than presenting a beach image. The seagull logo is used less, although it is still a large part of the business. Hollister is now
largely focusing on jeans. In general, it is selling cheaper clothes, and a loyalty program is also helping sales. It might be less cool than it was, but investors are happier than they were a few years ago.
There is however, much more to do. Although 105 stores have been or will be remodelled, Hollister has 542 stores in total all over the world. The brand must also be more careful to stay on trend because it cannot depend on its logo as much to drive sales.
Still, Hollister is into a new chapter of its life story – and it’s a profitable one.
Michael Kors: American Superstar
A few months ago, Michael Kors Holdings announced that it was buying Jimmy Choo. As retail goes through a tough time, Michael Kors Holdings may become an important competitor in the luxury market.
The company has traditionally sold to American consumers looking for ‘mid-market luxury’. Although appearing on Project Runway meant that Michael Kors himself became a household name in America, the company’s sales have been suffering.
Business analysts thought that shoppers were bored with Michael Kors and that the many items offered on discount were harming the brand image. Store experience was not a priority for the brand either.
The company is trying to turn this around through things like new designs for its high-end handbags, selling shoes in more of its high-volume stores, and spending more money on digital marketing. But buying Jimmy Choo means that Michael Kors Holdings may become the American middle-market version of European companies that own many luxury brands, like LVMH Moët Hennessy Louis Vuitton, Kering, and Richemont.
After a successful beginning making jet-set clothes for women, Michael Kors filed for bankruptcy protection in the early 90’s and came back spectacularly. He became the creative director of the luxury Parisian brand Céline, then went back to New York to rebuild his own brand after he received investment.
Coach, Michael Kors’ main competitor, has also started buying other brands, its first being Kate Spade. The two companies may be headed for a serious race to the top. However, Michael Kors Holdings is not interested in buying a large number of brands, but rather a select number of large luxury companies with style and heritage. If the company has a founder or family member that is still involved in running the company, Michael Kors would be even more interested.
The designer’s wisdom is that he “[said]….., wait a minute, find what makes you Michael Kors. Don’t look over your shoulder.”
Michael Kors is a fashion survivor and has succeeded in many different ways over the years. In a very different way to Hollister, the Michael Kors retail journey will continue changing.