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Luxury retailer Michael Kors Outlet reported sharply better than expected earnings this morning as sales advanced more than 70 percent from the year ago period.
The company said it earned net income of $68.6 million, or $0.34 a share, on total revenues of $414 million.
Analysts surveyed by Bloomberg had forecast results of $0.20 a share on sales of $365 million.
“During the first quarter we saw continued strength in each of our retail, wholesale and licensing segments and across geographies,” Chief Executive John Idol said. “In North America, our comparable store sales rose 38.4% reflecting the strong appeal of the Michael Kors Outlet brand, our consistent delivery of a compelling assortment of luxury products, and our exciting jet-set in-store experience.”
Sales at stores open more than a year improved 37.3 percent during the quarter and Michael Kors Outlet opened 76 new stores over the past twelve months. Wholesale revenues also advanced 66 percent.
The company now operates 321 stores worldwide, including those with licensee partners.
Michael Kors boosted its guidance for its full fiscal year by $100 million, to a range of $1.8 to $1.9 billion. Earnings per share are also expected to be higher than first forecast, at $1.32 to $1.34 for the year.
Shares are up more than 14 percent in pre-market trade.Replace Pioneer
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Handbag company Coach is trying to reinvent itself as a lifestyle brand, complete with clothing, watches and shoes.
But there”s one troubling aspect to Coach”s plan.
Unlike competitors Tory Burch and Michael Kors, Coach doesn”t have a larger-than-life designer to build its brand around, Cotten Timberlake at Bloomberg News reported.
As a result, the company will have to pay more for marketing. Even then, it”s quite possible that the brand won”t connect with consumers, Timberlake writes.
“The question is where is the authenticity going to come from?,” Jeffry Aronsson, a fashion brand-builder told Timberlake. “A brand is a reflection of the person who is leading it, that provides the authenticity, the foundation of a business.”
The founder”s identities are key to lifestyle brands.
Ralph Lauren evokes a British country estate in his marketing, while Kate Spade appeals to a city woman. Michael Kors Outlet identifies himself as a jet setter. Tory Burch relies on her image as a busy single mom.
Without a clear leader, Coach could face an uphill battle marketing a lifestyle brand.
The Michael Kors Outlet brand has achieved unstoppable momentum even in the age of discount retailers.
The company recently raised its guidance again after blockbuster sales in the second quarter.
Meanwhile, other aspirational brands like Tiffany & Co. and Restoration Hardware are struggling.
Michael Kors succeeded because it was the first retailer to hit the market”s sweet spot: people with money to spend but who aren”t rich.
Luxury marketing expert Pam Danziger calls these people HENRYs, for “High Earners Not Rich Yet.” They are the people who make between $100,000 and $250,000, she says.
HENRYs are a growing segment, while the wealthiest people are making less than they used to.
Danziger explained the concept to us in a recent note:
Ultra-affluents (i.e. those at the top 2 percent of U.S. households with incomes starting at $250,000) cut their spending by nearly 30 percent from 2010, while the HENRYs (High Earners Not RichYet with incomes $100,000-$249,999) increased their spending on luxury by some 11 percent from 2009 levels. Even though HENRYs individually have a far lower spending threshold than ultra-affluents, there are nearly ten HENRY households for every ultra-affluent. That is why with a total of 21.3 million households, the HENRY segment is a critically important part of the consumer market.
With Michael Kors” $450 handbags and $250 watches, HENRYs can show off their success without feeling like they”re going overboard.
Kors wisely chose the exact right audience, and now it”s paying off.
Read more: http://mk.luckbagsoutlet.com
Dan Perry via Flickr
Coach says it”s targeting different segments than Michael Kors, but now analysts are calling out that claim.
Corinna Freedman, an analyst at Wedbush, writes in a note to clients that Coach is getting ideas from the Michael Kors Outlet playbook.
For instance, it”s layering in higher-priced merchandised in order to create a “pricing halo,” as Michael Kors Outlet does. Coach is also presenting its products in similar ways, according to the note.
Freedman writes that it “highlights the increased competition between the two for customers.”
She used an example from Macy”s Herald Square location. At the store”s new revamped designer handbag section, Michael Kors Outlet and Coach are in extremely close proximity to each other.
From her note (emphasis ours):
“Following the earnings call, we took a walk over to the new Macy’s Herald Square to check out Coach’s new space in the recently renovated main handbag department of Macy’s Herald Square. We were struck first by the proximity of the KORS and COH spaces – directly competing with each other for eyeballs and foot traffic.
It is clear to us that the two brands are indeed direct competitors, despite Coach’s claims that the two are targeting different customer segments.”
Read more: http://mk.luckbagsoutlet.com
Michael Kors is the most sought-after teen brand this holiday season.
Handbags and accessories from the aspirational brand top teen girls” wish lists, according to a recent report by Piper Jaffray.
Analyst Erinn Murphy”s report provides a stunning stat that shows just how fast Michael Kors Outlet has grown.
“In our Fall 2010 survey, there were no mentions of Michael Kors Outlet among female wish lists,” Murphy writes.
In other words, the most popular current brand wasn”t even on teens” radars three years ago.
“We found that there were more Michael Kors Outlet brand references than any other accessories brands,” Murphy writes. “In fact, the Michael Kors Outlet brand alone garnered 3.1% of the upper-income female vote–nearly 4x its nearest competitors.”
While Michael Kors Outlet is benefiting from high demand for handbags and watches, the brand”s trendy styles have helped it outpace more established competitors like Ralph Lauren and Coach.
Michael Kors” sales increased a stunning 47% in the second quarter, the company reported last week.
The company is also the most searched-for retail brand online, according to a report by Digital Luxury Group.
Murphy writes that business will continue to improve as Michael Kors Outlet boots and sneakers become trendy.
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We’re in the heart of intern season, which means thousands of bright-eyed college and graduate students are putting in the hours, setting themselves up for long distinctive careers on Wall Street. Others, meanwhile, are shooting themselves in foot, killing their chances of finding work down the road, at least at the bank in which they’re interning.
In an effort to help keep the latter group as small as possible, we reached out to four vice presidents on Wall Street – two investment bankers at bulge bracket firms, a hedge fund exec and a consultant – to capture the dos and don’ts of being an intern. Each source not only currently manages interns, but has been one in the past at the MBA level. Two are female and two are male. They asked to remain anonymous to give you the real dirt. And off we go…
Male VP – Investment Banking
- Don’t take your necktie off. Ever.
- Be awesome to your assistant – she’s probably one of the boss’s assistants?too.
- Walk fast everywhere – people will think you are?busy.
- Don’t ever, ever ask for more work.
- When you get an offer, people will expect you to make a speech. Be prepared.
Female Hedge Fund Exec:
- Don’t wear flip flops to work in the morning,?even if it’s from the elevator to your desk. My feet?hurt too. Suck it up.
- Heels should be no higher than 4 inches. Leave your Louboutins at home. Only secretaries where the red soles to work.
- Don’t carry a bag that is exponentially nicer than your boss’s. And no logos. You don’t have to go super budget with a Kate Spade or Michael Kors Outlet catastrophe, but be cognizant of your surroundings. Saint Laurent or Valextra are fine.
- Don’t count calories openly if you are skinny. Use MyFitnessPal or some other app discreetly on your iPhone.
- No screen saver shot of your “amazing” boyfriend of __years.
- If flying on business, NEVER wear an underwire bra, it will set off the X-ray machine at security.
Female VP – Investment Banking:
- Ask questions! Don’t sit at your desk for hours spinning your wheels because you don’t understand something. If you have spent more than 5 minutes trying to figure something out and you know it shouldn’t take long, ask another person in your summer class and if they don’t know ask a full time analyst. Everyone assumes you are dumb and don’t know anything about this job. They won’t think less of you if you ask a question.
For more insights, read the full report at eFinancialCareers>
“We were looking at some fabulous advertising from the late seventies and early eighties for Virginia Slims and Charlie,” said Michael Kors Outlet before his show. “There was something about those women; they were very sexy, but sporty at the same time.” Kind of like the Kors woman. Come springtime, she”ll need clothes for tennis at the club, lunch and a meeting in the city, cocktails, cruises, and galas, too. And today, on his runway, Kors had plenty of suggestions: He started with Lilly Pulitzer pastels, in stripes or Impressionist florals for the court and the beach, and tossed in a few of his beloved caftans before the show was over, this season in an oversize black-on-white flower print designed to complement white maillots with gold-chain straps. For the office, there were chic navy suitings and this season”s must-have safari jacket paired with wide-leg trousers. After dark, his girls will have a few options: gold sequins, drapey black jersey, or fruity chiffons—as in guava, apricot, and apple.
With Olivia Newton-John”s Xanadu on the speakers, the show could have become kitsch, but Kors leavened the frivolity with a healthy respect for classic cuts and silhouettes—and don”t forget paper-thin cashmere, the building block of a smart spring wardrobe. In the battle between opulence and simplicity, Kors—when he”s on solid form like this—wins.Read more from: https://www.kalakendra.org/upcoming-events/