Michael Kors plans to open about 100 new stores in China over the next three years, as the US brand continues to plan massive global retail closures, becoming part of the recently announced “Runway-2020” restructuring program that will cut sales. The first announcement of the restructuring of Michael Kors emerged in the beginning of June, the following of this, as in the fourth quarter ended in April, the brand issued a double-digit increase in sales in the same store.
Actually, Michael Kors said that he will close 125 stores around the world. In New York luxury leather products and accessories added that the main moving factors of growth that will move in the future will be its retail presence in Asia and its burst categories of the stronger sex, each of which has the opportunity to become a $ 1 billion $ brand segment. The increase in Asia appears to be the main, more achievable goal: projects relating to 100 stores will be added only in China and elsewhere in the region in the process of the next few years. In the current period, 111 Michael Kors shops operate in Asia. In addition, approximately 100 global stores will be repaired, in order to more correctly implement the new chic collection of Michael Kors and redefine the elite factor of Michael Kors. Special salons for shoes are another area of intentional increase with the aim of branding. The company, in addition, wants a wholesale sale, aiming at the revived brand Michael Kors, which is 30% of wholesale and 70% of retail trade. Taking into account the aforementioned changes in retail trade and products in the same place, Michael Kors said that some forecasted earnings of $ 4.
25 billion are planned for the 2018 fiscal year. 1. Takeaways from the 2017 Michael Kors Investor Day The enterprise believes that China assumes $ 1 billion of Opportunities. The company expects to increase his own volume in Asia from 228 shopping stores now up to 335 stores in 2020, besides, more than fifty percent of new stores are located in China. Patrick Lee, President of Greater China and Southeast Asia, spoke about Michael Kors’ store footprint in Asia, with a focus on China. The company has 111 stores in 30 cities in the Greater China region.
Lee said that China is a great opportunity for growth, with 88 cities with populations of more than 5 million people. In the long run, the company would like to reach 200 stores in China, where the number of middle-class consumers is expected to rise to 40–50 million, and potentially climb to 100 million, giving the country the largest middle-class population in the world. China is a big strategic market for Michael Kors. Management projects that, within three years, the brand will have a presence in 335 Asian cities, including 180 Chinese cities. The company has strategically been building its brand name in Asia over the past five years, with flagship stores in key cities such as Shanghai, Beijing, Chengdu, Hong Kong, Taipei Singapore, Tokyo, and Kobe. The management announced that China expects the firm to have 1 billion dollars profits in the Asia-Pacific region increased from 110% of the CAGR from 2012 to 2017 from $10 million.
to $409 million. The company is trying to increase the recognition of its own brand among the rising middle class in Asia, and in addition, is also working to expand its men’s business into Asia. Relating the Article to Course “Growth strategies and opportunities” topic This two-article shows how the company develops strategic plans for opportunity growth. Like other companies, Michael Kors expands its horizons and opportunities in the new Asian target market. Also, the company takes care of its brand image. Therefore, they strengthen their positions on the world scale. Global growth opportunities: · Globally sustainable competitive advantage · Adaptability · Global culture (“Chapter 7: International retailing strategy”) The first article represents how company use a key to success in global growth strategies like an adaptability.
According to Chapter 7(International retailing strategy) Michael Kors company, also recognize cultural differences and adapt their core strategy to the needs of local markets. The second article shows how company use a global culture strategies. According to the calculations of this population, the company made up the expected profit and income. Implications for the Retailer and Competitors These articles are an excellent example of how the company is not afraid to expand and open up various world markets. Next few steps show exactly how company focused of innovations and changes. Retail focus on: · 100 global stores will be renovated to sell better a new Michael Kors luxury collection, and · reposition the high-end factor of Michael Kors.
· Specialty salons for shoes · Minimize wholesale, aiming for a revived Michael Kors brand · Create engagement and loyalty through social media Personal Opinion Since I am a buyer and a company fan, I was pleasantly surprised that the company is not just thriving but also aimed even more at Asia. I believe that the goals that were set forth in these articles are realistic implementation and the company will conquer Asia as a whole. I really liked these articles although they seem similar I found a lot of interesting and new information.