Michael Kors overcame bankruptcy and found success through strategic partnerships and diversification of products.
Accessories played a crucial role in Michael Kors' brand growth and appeal, leading to the introduction of lower-priced lines.
Kors' perseverance, relationships, and versatile designs contributed to his business expansion and popularity.
Deep dives
Michael Kors: Scaling a Fashion Brand
Michael Kors, a fashion brand, started as a small boutique on Fifth Avenue, designing and selling luxury women's separates. With a unique and versatile approach to luxury, Kors quickly gained recognition and was noticed by Don Mello, the fashion director at Bergdorf Goodman. This led to a successful partnership and the expansion of the Michael Kors brand. Facing financial challenges, Kors went through bankruptcy but recovered with investments from LVMH and Onward Kashiama. The brand diversified its product range, introducing accessories, fragrance, and menswear. In 2003, Silas Chow and Lawrence Stroll became key investors, bringing in cash and aggressive management to scale the business. The brand grew into a multi-billion dollar company, with Michael Kors himself still leading the way.
The Power of Accessories
Designing for Celine helped Michael Kors understand the power of accessories. He witnessed their ability to transform and democratize fashion, leading to a shift in his brand's focus. Michael Kors started designing and licensing accessories like shoes, sunglasses, and fragrances, broadening the product mix and appealing to a wider audience. This move proved successful, as the brand gained momentum and diversified its revenue streams.
Recovery and Partnership
Michael Kors faced challenges, including bankruptcy and a failed licensing arrangement. However, a pivotal turning point came in 2003 when investors Silas Chow and Lawrence Stroll acquired a majority stake in the brand. With their involvement, Michael Kors received a significant cash infusion and aggressive management that set the stage for scaling the business. The partnership propelled Michael Kors into the global fashion market, positioning it alongside other iconic designer brands like Ralph Lauren, Tommy Hilfiger, and Calvin Klein.
Starting Small and Scaling Up
The podcast episode explores Michael Kors' journey from starting his clothing business in his apartment to expanding it across the country. He recalls hand-delivering his clothes and even showcasing them in his own bedroom for the New York Times and Anna Wintour. Despite lacking traditional business knowledge, Kors persisted and built relationships with fabric suppliers and boutique owners. Eventually, he partnered with a real estate businessman and gradually grew his business, expanding to new cities and stores. Kors' success can be attributed to designing versatile and accessible clothing that appealed to a wide range of customers.
The Power of Accessories and Creating a Lower Price Line
The episode highlights the significance of accessories in Michael Kors' business. Kors realized that accessories, such as handbags and shoes, had a broad appeal, transcending age and location. He recognized that they were the ultimate democratic items in fashion. To further expand his brand, Kors launched a lower price line called Cores by Michael Cores. While some designers may hesitate to venture into lower price ranges, Kors believed in providing thoughtfully designed, high-quality products at different price points. This strategy allowed him to reach a wider audience and cultivate a sense of luxury in affordable streetwear.
As a teenager, Michael Kors filled his notebooks with dress designs and doodles of his own initials—casual sketches that would eventually fuel the launch of a global fashion brand. Michael grew up with a love of fashion; by the time he was 19, his designs were on display on 5th Avenue, and by 22, his collection was getting attention from the fashion editor of New York Magazine, a young upstart named Anna Wintour. In the early days, he designed thousand-dollar dresses in his bedroom and delivered them in his aunt’s car. As the business grew, he launched a new line with an unproven partner that would eventually lead him to bankruptcy; then, after he recovered, he successfully branched out into eyewear, fragrances, and handbags, all branded with his now famous “MK” initials. Today, Michael still heads Creative at Michael Kors, and the brand has grown into a massive company that includes Jimmy Choo and Versace.