Michael Kors Too Popular And ‘No Longer Considered Cool’?

Michael Kors rose in popularity with a line of trendy handbags and watches. But as its stock declines, is Michael Kors’ popularity also on the fall?

So what exactly happened to the popular designer?

According to the Robin Report, Michael Kors’ decline comes from widespread popularity, which is “the kiss of death for trendy fashion brands, particularly those positioned in the up-market younger consumer sectors.”

The Robin Report adds, “Its distribution is racing towards ubiquity, wholesale and retail (online, its own stores, outlet stores and internationally)… Even worse… is its expansion into multiple product categories and sub-brands, so they can compete at all price points.”

So what exactly does that mean?

“In other words, consumers won’t pay $300 for a Michael Kors bag in a department store when they can get one at the outlet mall for half the price.”

Business Insider points out that Michael Kors is “an aspirational brand with consumers paying a premium for its label” but that once the product has become so widely popular and available, “it is no longer considered cool.”

It’s official: Michael Kors isn’t cool anymore http://t.co/QXam5AWsfe

— Business Insider (@businessinsider) April 10, 2015

Business Insider is quick to point out similarities between Michael Kors and other designer lines like Tommy Hilfiger, Juicy Couture, Jordache, and even Coach.

All of this talk comes at a time when Michael Kors stock is decreasing. Within the past year, shares have decreased by nearly 33 percent. So what’s the deal with the falling stock?

According to the Motley Fool, the drop reflects “fears about slowing growth,” although the Motley Fool is also quick to point out that Michael Kors is still doing well, just not as well as before.

“Sales in North America increased 22.6% to $1.1 billion, while comparable store sales grew 6%.”

So what’s so bad about that? In prior years, Michael Kors had grown by “10.8% in the September quarter and 24% in the December quarter during the prior year.”

The drop in stock and cool factor has even caused Michael Kors to be removed from Morgan Stanley’s analysts’ “Best Ideas” list.

So can Michael Kors come back from such a slump? Some business insiders are worried it will follow in the footsteps of handbag designer, Coach.

Coach, which was once widely popular like Michael Kors, found itself in a similar position after it “went too far in its expansion efforts.” Now, the company is working to transform itself and its image and return as a leader in designer markets.

So will Michael Kors stock and popularity keep falling, or will it be able to learn from the mistakes similar companies have made in the past?

[Photo Courtesy of Wikipedia]