Michael Kors – a salutary lesson in not taking experience for granted

It may at first seem counter-intuitive – why should the purchase of one luxury group by another cause investors to feel nervous?

Perhaps less governed by the financial implications of the move, it comes down to brand – specifically that if you’re going to expand, it has to be from a position of strength. And future-proof strength only comes, as our recent FutureBrand Index demonstrated, when ‘purpose’ and ‘experience’ are aligned and functioning optimally.

The Michael Kors brand experience has been steadily weakening, driven by aggressive expansion and heavy discounting, effectively eroding consumers’ reasons to feel excited about the purchase of a luxury bag (the stalwart of the business), shoes or clothing, and causing them to take their £300 to any one of its competitor stores.

In other words, you can’t assume that because you had once invested heavily in delivering the right proposition and creating the right image, it’s OK to take your foot off the gas and hope that you can coast on the remnants of that experience while you channel investment into alternative, or cheaper, growth elsewhere.

Experience needs to be nurtured, and consistently. It needs to be informed by, and live up to, your purpose. When one or both decline, or fail to synchronise, the results aren’t simply detrimental to brand image, or brand perception, but to the bottom line.

Let’s hope Capri Holdings, as the newly formed conglomerate of Michael Kors, Versace and Jimmy Choo will be known, learns this lesson, and presents a sunnier image to investors and consumers fast.