NEW YORK CITY — In federal court Monday, legendary fashion designer Michael Kors spoke about the daunting challenges of staying relevant in a world where brands can build on viral TikTok videos and Taylor Swift. Photos of handbags on the arms of celebrities such as Taylor Swift have come and gone.
A week after FTC lawsuit seeks to block Coles from testifying in Manhattan antitrust trial tapestryAcquired Capri for $8.5 billion. The deal, if approved, would bring six fashion brands under one company: Tapestry’s Coach, Kate Spade and Stuart Weitzman and Capri’s Versace, Jimmy Choo and Michael Kors.
The FTC subpoenaed Kors to testify on Monday. However, in his presentation, Coles described how even legacy brands like his own can struggle and lose shopper interest.
“Sometimes you become the hottest guy on the block,” he said. “Sometimes you’re lukewarm. Sometimes you’re cold.”
He acknowledged that his namesake brand had fallen out of favor and needed a refresh.
“I think we’ve reached a point of brand fatigue,” he said.
The FTC believes that the combined companies, especially Coach and Michael Kors, which are owned by the same owner, will create a luggage giant with the power to raise prices to customers while providing them with the same or worse products.
On the other hand, lawyers for Tapestry and Capri questioned the FTC’s characterization of the consolidated handbag market. They said competition is intensifying as consumers consider higher-priced luxury brands and lower-priced fast-fashion brands and can shop from online-only platforms and second-hand markets.
The trial comes at a time when consumers are hesitant about high prices and the closely watched U.S. presidential election results could alter federal agency strategies.
Shares in Capri, which includes Michael Kors, reflect what designer Kors describes as tougher times. As of Monday afternoon, the company’s shares were down about 24% this year. That lagged well behind a gain of about 18% S&P 500 Index Tapestry is up about 17%.
In its latest financial quarter ending in June, Michael Kors’ reported revenue fell 14.2% from the same period last year, or 13.3% at constant exchange rates.
Coles said he remains a student of the fashion industry and gets inspiration from spending time on store floors, talking to customers or people-watching in places like airports. Even as an industry veteran, he says he has to be quick on his feet.
For example, he said he learned about Aupen, a newcomer to the handbag industry, when he saw a photo of Taylor Swift carrying one of the company’s handbags. He said when he visited the company’s website, it crashed.
“It shows you the power of women like this,” he said.
In separate testimony Monday, the former macy’s department store CEO Jeff Gennette said when a brand loses some of its luster, retailers feel it too. Gennett, who retired earlier this year, said department store sales took a hit because of an overreliance on the Michael Kors brand. He said the price cuts on Michael Kors handbags contributed to “the bad spiral Macy’s was going through when I was there.”
The antitrust trial is expected to wrap up on Tuesday with testimony from economists, including one from the Federal Trade Commission and another from the companies.
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