Teens love Michael Kors. The fashion line, which is known largely for its handbags and signature MK print, turns out to have an enormous teenage fan base. According to a semiannual teen survey released this week by Piper Jaffray, a U.S. investment bank and asset management firm, the teenage glamour of the Michael Kors label is significant, especially in terms of handbag sales. According to the survey, Kors has reached new highs: 39 percent of average-income girls choose Kors as their preferred handbag label, up from just 7 percent in a 2012 survey. Rival handbag maker Coach fell from 46 percent to 17 percent in the same period.
Bloomberg commented on the Spring/Summer 2015 survey, writing: The bad news for Coach is that the power of teen shoppers far exceeds their spending. Teens are highly influenced by other consumers, making the demographic an important indicator, and young shoppers become an influential force once they pick up on something. Coach's satchels, duffels, and crossbody bags long dominated the market for "affordable luxury," fancy goods that don't carry the sky-high price tags of such true luxury brands as Chanel and Hermès. Now in a deep slump, the company is in the early stages of a revamp that includes new marketing campaigns and overhauls of its stores and merchandise. Coach brought on Stuart Vevers, a veteran of several European luxury labels, such as LVMH-owned brand, Loewe, as executive creative director in 2013.
In an effort to curb its own ubiquity and bolster its cachet, Coach is also reducing discounts. Its handbags won't be able to recapture teens until after addressing the core customer—an older, more affluent crowd. "You're just not seeing that turn yet with the teens," says Murphy. "They're still looking at Michael Kors."
Yet Kors, for all its power and prominence, isn't safe either. Alarms of Kors becoming too ubiquitous—as Coach once did—have rung as sales slowed in the past year. Among teens, Kors is reaching territory once inhabited by Coach as the overwhelming favorite. This position proved unsustainable for Coach, pulling the company back down to earth.