Ronald Friedman, Co-Leader, Retail/Consumer Products Industry Group, Quoted in Los Angeles Times Article "Affordable Luxury Brands Are Booming in Popularity"
Los Angeles Times
By Tiffany Hsu
Excerpt:
Bets on the top-performing retailer this holiday don’t favor the storied haute couture companies — not Chanel with its $4,500 handbags, nor Neiman Marcus and its $150,000 bespoke falconry set.
Instead, it’s Michael Kors Holdings — an American sportswear brand from a sassy former “Project Runway” judge — that’s roundly predicted to crush Christmas.
The company is what’s known as a bridge brand, operating on the low end of luxury. Its handbags generally cost less than $500. But the sector’s mix of just-high-enough prices and accessible-yet-glamorous design makes brands such as Kors, Kate Spade and Tory Burch like catnip for consumers who are sick of curbing their spending but still wary of an uncertain economy.
Well before Black Friday, the Kors store at the Citadel Outlets in Los Angeles had a line out the door. The company boasts of trying to “appeal to a younger demographic.” The social-media-savvy brand gained nearly 34,000 new followers in the 18 hours after launching the first-ever Instagram ad last month.
Kors’ stock, which fell 27 cents Thursday to $83.92, is up 64.5% so far this year and 246.8% since its debut nearly two years ago. During the quarter ended Sept. 28, revenue soared 38.9% and earnings per share rocketed up 44.9%.
“The market for these brands doesn’t seem subject to the recession — their business is consistently getting better and better,” said Ron Friedman, leader of the retail practice at consulting firm Marcum.
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