Gucci, Louis Vuitton face threat from likes of Michael Kors
PARIS — While Gucci and Louis Vuitton blame slumping sales on their upmarket drive they argue will help them regain some of their lost glory, there is growing evidence they are losing out to newer, more affordable luxury brands.
After years of rampant expansion, Kering and LVMH (Gucci and Louis Vuitton’s respective parents) are finding the likes of Michael Kors are proving smarter at tapping the fast-growing middle classes, particularly in big markets such as China.
Emerging market customers — the industry’s main growth engine — were previously ready to save up to buy traditional status symbols such as a Louis Vuitton €625 (S$1,090) canvas bag, but now they are showing stronger appetite for new brands such as Michael Kors that cost less.
“Brands like Louis Vuitton are expensive, and I see it everywhere I go,” said Ms Saltanat Shamova, a 25-year-old Kazakh studying in London. “Michael Kors was best for me because the design was simpler and the price was affordable.”
The New York-based brand embodies affordable luxury: giving consumers a taste of class without the high price tag.
Part of Kors’ success is that its products subtly replicate the style of big luxury brands such as Louis Vuitton’s cylinder Speedy bag and Chanel’s quilted leather tote.
Kors’ US$300 (S$381) Weston shoulder bag has the same fringed pompom and shape as Gucci’s US$2,650 Jackie shoulder bag.
Other fast-growing accessible fashion luxury brands include the more US centric and feminine Kate Spade and logo-heavy Tory Burch, as well as the more sober and minimalist Furla in Italy and France’s classic Longchamp handbag maker.
There are also France’s Carven and Isabel Marant and the UK’s Karen Millen.
Industry observers say China’s rapidly evolving consumer culture, with government policies discouraging luxury gift-giving, helps explain the rise of these more affordable brands.