In the fashion world without flowers, the balance will not always tilt to one side.
According to the fashion business news, when all eyes of the industry are focused on young people, trying to use the post-90s and even post-00s stars to mobilize the enthusiasm of the new generation of consumers, the American luxury brand Coach suddenly turned its style and announced a 50-year-old female Actor, singer and producer Jennifer Lopez replaced 27-year-old Selena Gomez as the brand’s global spokesperson, causing widespread concern.
Coach creative director Stuart Vevers said that Jennifer Lopez ’s unique approach and Coach ’s new attitude coincide with each other, and look forward to the upcoming cooperation. “She is from New York like Coach and naturally can have an emotional connection with the classics of the brand. “It is reported that Jennifer Lopez will shoot advertising campaigns for Coach’s full range of products in the spring of 2020, presenting Coach’s latest leather, ready-to-wear and footwear products to consumers.
In fact, Jennifer Lopez has been associated with Coach since 2002. She carried various Coach classic handbags into the mirror in the “All I Have” MV. Although she is now 50 years old, she has always maintained a perfect state. It has recently appeared on the cover of the American edition of “GQ”, and was selected as the icon of 2019. It is an example and aspiring model for many female consumers, and has a strong carrying capacity in the world. Currently, Jennifer Lopez has more than 100 million followers on Instagram, and her number of likes to become a Coach spokesperson is close to 520,000.
Jennifer Lopez has been with Coach since 2002
Some insiders pointed out that Coach’s move has refreshed consumers ‘perception of luxury brands’ crazy embrace of young traffic in recent years, but from July 26 this year, when Coach chose 31-year-old Liu Wen as the brand spokesperson, he could smell the brand’s positive Gradually shift the focus of marketing back to mature consumer groups. Previously, the brand’s full range of women’s products in China was represented by Guan Xiaotong, 22 years old.
And with the “T-shirt incident” and the impact of Liu Wen’s termination slowly diminishing, the announcement of Jennifer Lopez as a new spokesperson at this time is undoubtedly a good opportunity to restart the topic of Coach, especially in the current fierce competition. Targeting mature people who have been neglected for a long time may be a new breakthrough.
But this does not mean that Coach completely abandoned the young consumer market. For nearly a year, Coach’s product design has always emphasized the coexistence of old and new. Rather than simply launching a new handbag style, Stuart Vevers is more inclined to seek inspiration from classics and inject modern elements. During New York Fashion Week in September this year, Coach opened a limited-time pop-up store on The Coach Orginals on Madison Avenue. It re-sold classic models such as Duffle bucket bags, Courier messenger bags and Dinky diagonal cross bags from the 1960s to the 1970s.
At the same time, Coach’s Tabby, Troupe and Hadley handbags are also sought after by consumers, and the brand’s collaboration with Disney has received positive market response. In order to further enhance the brand’s fashion authority, Coach also collaborated with Michael B. Jordan to launch anime Naruto series. In order to better grasp the Chinese market, Coach also followed in the footsteps of rival Michael Kors and began to re-login on Tmall to open an official flagship store in September this year. Previously, the brand had left the market twice due to counterfeit issues.
Under a series of innovative measures, Coach’s performance seems to be back on track. According to data from Fashion Business News, Coach’s sales increased by 1% to $ 966 million in the three months ended September 28, with a gross margin of 70.1% and a net profit of $ 200 million. Tapestry Group specifically pointed out in its financial report that the high profit margin Coach handbags in the Chinese and European markets offset the downturn in the North American market, but the overall sales of the Group still fell 1.4% to 1.36 billion US dollars, and the net profit recorded 20 million US dollars, but exceeded the analysis Division expected.
The picture shows the performance of the Tapestry Group in the past 5 months
The Group’s new CEO Jide Zeitlin admitted in a conference call after the earnings report that Tapestry is at a critical turning point, and that having a meaningful resonance with different consumer groups will be the top priority in the new stage of transformation and upgrading. In order to make the product mix of the three major brands more diversified, Tapestry Group will continue to introduce talents and formulate strategies according to different markets and local conditions in the future to promote performance growth.
Other analysts believe that Coach’s signing of Jennifer Lopez’s main purpose is to further suppress Michael Kors parent company Capri Group. It is reported that Jennifer Lopez was a potential spokesperson for Italian luxury brand Versace. In September this year, he appeared on the brand’s show and became the final model. Versace was included in the Capri Group last year. The original spokesperson of Versace and Michael Kors Yang Mi switched to this year. Stuart Weitzman, a luxury footwear brand belonging to the Tapestry Group.
Since the US luxury luxury sector has changed from “three-legged stand” to “heroic hegemony”, both Tapestry Group and Capri Group are accelerating the reorganization of their businesses, and they want to spend the break-in period as soon as possible to gain more initiative. , The smell of gunpowder between the two is getting stronger.
At present, the Tapestry Group ’s brand matrix is positioned as luxury and high-end Coach, footwear brand Stuart Weitzman and younger Kate Spade. Capri Group ’s brands are Michael Kors, Jimmy Choo and Versace. The largest Coach and Michael Kors remains the key match point.
In July this year, Michael Kors announced that Wu Lei and Song Zuer were the post-90s stars.
Unlike Coach, the core of the strategy of Michael Kors, founded in 1981, is clearly placed on “innovation” and “invite new”. In the past two years, Whitney, Mercer and CECE series handbags have been launched, and the brand has a contract with Yang Mi After the expiry, Wu Lei and Song Zuer were appointed as spokespersons. In May of this year, Michael Kors also cooperated with younger generation KOLs such as Dong Youlin, Sunshine Group, Fil Xiaobai, and Akeli, which is regarded as another bold innovation of Michael Kors in star strategy. (Further reading: In-depth | MICHAEL KORS’s ambitions in China)
In order to enhance the brand ’s influence in the Asian market, Michael Kors also extended its star strategy to the Japanese and Korean markets earlier this year, announcing that Japanese actress and model Tsubasa Honda and Korean artist Lin Yuner were ambassadors for the brand. Internationally, the brand cooperated with Bella Hadid and Gigi Hadid and other post-90s supermodels maintained a good relationship.
According to the latest “Youth Favorite” report issued by investment bank Piper Jaffray, the most popular handbag brand for Generation Z consumers in the United States is Michael Kors, which received 28% of the votes, followed by Kate Spade, followed closely by It was Louis Vuitton and Coach, each with 11% of votes, more than 8% of Gucci.
However, the consumption power of the younger generation is being questioned. According to the CNBC report, the current spending of youth on handbags has reached a record low. Among them, the average spending of female teens on handbags is less than $ 100 per year, compared to $ 197 in 2006. Analysts said that the general decline in sales of new handbags was mainly due to online resale platforms such as The RealReal grabbing brand market share, providing more choices for young consumers.
UBS analyst Jay Sole even more bluntly that the resale market will damage market share of light luxury brands such as Coach and Michael Kors. He pointed out in the report that more and more consumers choose European luxury brand handbags that are used for $ 400. Instead of new handbags of the same price, the average selling price of Coach handbags in September has fallen by 5% and will continue to decline in the future.
Affected by this, even with the pursuit of consumers of Generation Z in the United States, Michael Kors’ sales in the three months ended September 28 still fell 4.2% to 1.089 billion US dollars, although Capri Group sales rose 15.1% year-on-year to $ 1.442 billion, but net profit fell 7.8% to $ 177 million.
The picture shows the performance of Capri Group in the past 5 months
In general, as the polarization of the luxury market becomes more and more obvious, the combination of Coach and Jennifer Lopez is in line with the strategic goals of the brand’s evolution to higher-end luxury products and further expands the brand audience. It is undoubtedly a wise Lift. Given Kate Spade’s current youth rejuvenation strategy, Tapestry Group is not afraid of losing its next-generation consumer market. Jide Zeitlin said at the earnings conference that in the future, he will increase investment in Kate Spade’s product innovation and marketing, while attracting more potential customers while maintaining the original loyal consumer group.
Some analysts pointed out that in order to stimulate revenue growth, the acquisition arms of Capri and Tapestry Group will continue. Now the industry has pointed out some potential acquisition targets of these two groups, many of which are from Europe. Accessories brands mentioned by industry analysts Including Furla in Italy and Longchamp in France, both of which are family-owned companies with strong growth performance and stores all over the world, and bankers engaged in luxury business also mentioned another traditional British brand Mulberry.
According to sources quoted by Reuters, cheap golden goose, an Italian light luxury brand that may be seeking to sell, has been selected by Tapestry Group. Other potential buyers include Calvin Klein’s parent company PVH Group and Ralph Lauren. The cash flow of the Tapestry Group has been strong in recent years, even in the years when Coach lost power.
Capri Group CEO John Idol said earlier that for Michael Kors, the acquisition of brands such as Jimmy Choo is part of the group’s grand plan to build the “LVMH in the United States.” In the future, it will continue to focus on fashion full of personality, potential and international vision. Brand.
Facing the former luxury brands such as Louis Vuitton, Chanel and Hermes firmly dominated the head position, followed by second-tier light luxury brands such as Tory Burch and Rebecca Minkoff, and emerging brands such as By Far and MANU Atelier catching up, plus The current situation of second-hand platforms such as The RealReal pinches midway, and the industry has left little room for mid-range luxury goods such as Coach and Michael Kors.
To make matters worse, Tapestry and Capri Group also need to face pressure from the continued deterioration of the economic environment. For example, in one of the largest markets in the United States, there will be more fashion retailers applying for bankruptcy protection. Although online sales have improved, it will help offset the decline in physical store sales, but it will also reduce consumers’ impulse shopping. In the cold winter of the US department store retail industry, the impact of e-commerce is still the biggest pain point.
As LVMH boss Bernard Arnault predicted earlier, the rise of protectionism has become an important threat to luxury fashion retail since Trump was elected president of the United States. In an increasingly complex global market competition, brands must become more distinct and sharper To be more recognizable in order to remain attractive.
Both Coach and Michael Kors, in the concept of the light luxury market that is gradually dissolving, cannot bypass the process of change, and brands without prominent features that do not let consumers know what they represent will have a harder time getting limited attention from consumers. .
Since this year, Tapestry Group’s share price has fallen by 25%, with a market value of approximately $ 7.1 billion, and Capri Group’s share price has decreased by 14%, with a market value of approximately $ 5.2 billion