Michael Kors revenue soars 44% as it readies e-commerce expansion
Revenue at Michael Kors has soared 43.4 per cent with sales up 24.2 per cent as the luxury fashion retailer readies the launch of its revamped US e-commerce site this September.
The company posted a revenue increase to $919.2m from $640.9m in the three months to the end of June 2014, while retail net sales increased 47.5 per cent to $480.2m driven by a 24.2 per cent hike in comparable store sales.
Speaking on a conference call to investors this morning, John D. Idol, the company’s chairman and chief executive, accredited the growth to Michael Kors’ efforts in establishing itself as a luxury brand outside of North America – revenue in Japan increased 89 per cent, while in Europe it jumped 128 per cent in the period.
Idol said that the launch of its new in-house e-commerce site, set to roll out in September, will serve as a “tremendous opportunity” to grow the brand, and turn around a site that he believes was not “best in class” in the sector.
“Our new site will serve as a powerful marketing tool and will also allow us to more fully engage our customers every step of the way on their path to purchasing a Michael Kors luxury product.
“The site looks phenomenal and that experience we now believe will be best in class in terms of shopping experience, and also in terms of the branding experience, in particular the Destination Kors portion of our website which will tell you everything that’s happening with the brand around the world.”
He added that Destination Kors will offer fashion advice from Michael Kors and serve as a “personal stylist” to consumers.
Idol also revealed the “exciting technology” he previously hinted at to complement the new e-commerce experience. This will take the shape of an integrated, omnichannel shopping experience to streamline its consumer experience and allow online shoppers to collect products from its bricks and mortar stores, The move will step up Michael Kors' offering and bring it in line with other retailers in what Idol called a “competitive issue”.
“We are working very diligently on that, so I’d say that [will happen] in the first part of next year where again we’re going to try and take a leadership position where we give the best service to our customer. We believe that part of being a luxury brand is service, and this is going to mean speed to delivery in-house.”
Idol revealed that the new site will be “very substantial” for the business long term and predicted it to eventually account for around 20 per cent of Michael Kors’ global revenues.
The brand is also readying a new ad campaign to support the launch of its menswear business, which will include a “thrilling TV spot” based on an action movie in addition to a print campaign.