Designer Michael Kors poses backstage before the Michael Kors Collection Fall 2017 runway show at Spring Studios on February 15, 2017 in New York City.
Dimitrios Kambouris | Getty Images
NEW YORK CITY — In federal court on Monday, famed fashion designer Michael Kors described the challenges of staying relevant in a world where brands rise and fall on photos and TikTok videos of celebrities like Taylor Swift and Beyoncé cradling his handbags under their arms.
Cors was in Manhattan to kick off a week of testimony in the antitrust trial as the Federal Trade Commission lawsuit tries to block it. TapestryTapestry has acquired Capri for $8.5 billion. If the deal is approved, it will bring six fashion brands under one umbrella: Tapestry’s Coach, Kate Spade, Stuart Weitzman and Capri’s Versace, Jimmy Choo and Michael Kors.
The FTC called to testify on Monday that Kors, who founded his eponymous label in 1981 at age 22 and still serves as its chief creative director, but in his remarks he explained that even established brands like his own can struggle and lose interest from shoppers.
“Sometimes you’re the most popular guy in the neighborhood. Sometimes you’re lukewarm. Sometimes you’re cold,” he said.
He acknowledged that his eponymous label was losing popularity and needed a makeover.
“I think we’ve reached a point of brand fatigue,” he said.
The FTC alleges that a merger between the two companies — particularly having Coach and Michael Kors under the same ownership — would create a handbag behemoth with the power to raise prices while offering customers comparable or inferior products.
Meanwhile, lawyers for Tapestry and Capri have questioned the FTC’s portrayal of a consolidation in the handbag market, arguing that competition is growing as customers consider both expensive luxury brands and lower-priced fast-fashion brands and can shop online-only platforms and second-hand marketplaces.
Joan Crevoiserat, CEO of Tapestry, at the New York Stock Exchange on October 31, 2022.
Source: NYSE
The trial comes as consumers push back against rising prices and as the outcome of a closely watched U.S. presidential election could change strategies for federal agencies.
Capri’s stock, which includes Michael Kors, is reflecting the grim situation described by designer Michael Kors. As of Monday afternoon, the company’s shares were down about 24% so far this year, far behind Michael Kors’ roughly 18% gain. S&P 500 And Tapestry was up about 17%.
In its most recent quarter, which ended in late June, Michael Kors’ revenue fell 14.2% on a reported basis and 13.3% at constant currencies compared to the same period last year.
Kors said he remains a student of the fashion industry, drawing inspiration from spending time on store floors, talking to customers and people-watching at airports and other locations. Even industry veterans have to stay nimble, he said.
For example, she said she learned about Orpen, a newcomer to the handbag industry, when she saw a photo of Taylor Swift carrying one of their handbags, and when she visited the company’s website, it crashed.
“It shows the strength of women,” he said.
In separate testimony on Monday, former Macy’s CEO Jeff Gennette said that when a brand loses its luster, retailers feel it. Mr. Gennette, who left the company earlier this year, said the department store’s sales suffered because it relied too heavily on the Michael Kors brand. He said that discounting Michael Kors handbags contributed to “the downward spiral that Macy’s was going through during my time here.”
The antitrust trial is scheduled to conclude on Tuesday with testimony from economists, including one for the FTC and one for the companies.