"Light luxury miracle" is only a flash in the pan?

"Luxurious" is the same as "Fast Fashion". It is a bright and eye-catching area for the performance of the fashion industry in the past two years. As high-end luxury goods have been “crazy” for a decade in China, the level of market space has become increasingly clear. Many “light luxury” brands represented by Coach, Michel Kors, CK, etc. began to be loved by consumers, and this trend has expanded rapidly, which is evident from the activity of the manufacturers. In May 2014, the Michel Kors flagship store opened in Shanghai. The hot-selling four goddess Miranda Kerr, Gao Yuanyuan, Lin Zhiling, and Carina Lau were invited to the show. However, according to the latest news, Credit Suisse issued a negative report to Michael Kors, causing the company's shares to plummet by 10% on January 6, 2015.

China Economic Net Fashion Channel found that the business news came from bad news, including kate spade and Coach. Kate spade In the third quarter of 2014, same-store sales increased by only 15.2%, which was half of the 30.4% in the second quarter. Recently, the light luxury brand C, which was once valued at US$350 million. Wonder announced the liquidation, will close all brand stores. As a “sportsman”, Coach revenue fell 5.3% in FY2014, and net profit excluding restructuring and other expenses fell by 18.7%. According to another report, in the first 11 months of 2014, Coach's share price fell by nearly 40%.

Recalling the process of the emergence of “little luxury”, professionals have had many analyses: LVMH Group’s Board of Directors** and CEO Bernard Arnault repeatedly stated in an interview that they did not accept the “light luxury” brand as a luxury goods industry. Brands have no exclusivity, and both inflation and decline are easy and rapid. He also said that "little luxury" has its specific market, but only one brand is difficult to last. From the rise in the market share of many light luxury goods to the recent poor performance of representative brands, the above judgment has been so well verified.

Some commentators stated that Michael Kors is repeating the mistakes of Coach's failure, rapid expansion, high inventory, and a "discount strategy" that has lowered the brand's positioning, which are the causes of poor management. In the face of continuing alarms, light luxury brands have also taken some measures to deal with them. A few days ago, Coach announced that it would acquire Stuart Weitzman, a high-end shoe brand in the United States. This meant that the “5050” sought by the knee-length bootsman had to go to Coach to buy it. According to reports, expanding the product line is just one of the brand's many actions: In 2014 and 2015, the brand will spend between 250 million and 300 million US dollars for restructuring and transformation.

China will remain the most important market for global luxury growth in the future. The analysis of the China Economic Net Fashion Channel believes that as the city’s emerging consumer stratum continues to grow, young and pursuing consumer quality “precision” crowds will be the most important target group for the “light luxury” brand. Demand is an objective reality. How to properly handle pricing, business models, sales strategies, and propaganda tactics to ensure that brand positioning continues to be recognized by consumers is what operators really need to consider.