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“It’s true: I am an optimist,” declared Michael Kors, sipping on his favorite beverage, iced tea, as he addressed the dinner crowd at the WWD Apparel and Retail CEO Summit on Monday evening. “And on that level, I swim in the opposite direction of a lot of those in the fashion industry.”
That attitude is generating sunny results at Michael Kors Holdings Ltd., which has delivered sizzling financial results quarter after quarter since going public in 2011. Driven by vigorous demand for its accessories, shoes and apparel, the company has been opening stores at full tilt around the globe and attracting droves of investors to its envy-inducing growth story. Wall Street now values Michael Kors in excess of $15.5 billion, and on Friday the stock will be added to the S&P 500 index.
Apart from optimism — and the Kors brand has always been, in part, about an upbeat attitude in contrast to the moodier ethos of some European labels — what’s been the formula for that explosive success? Much of it has been about marrying pragmatism and accessibility with luxury and glamour, explained Kors. It’s an adept combination that has so far proved golden.
“I’ve always treated my customers like we’re in this together. I try to figure out before they know what they want, what’s going to make their closets look new but still at the same time have longevity,” he explained. “When I’m putting a collection together and designing it, I always try to have a balance: it has to function, it has to be pragmatic enough to work in life — but it still has to change your spirit and your mood.”
Great design takes everyday life into account — but is also aspirational, he noted. “If the most fabulous handbag in the world is so heavy that all you want to put in it is a feather and a credit card, it’ll never be the bag you grab for. If the pants you love only work with a tunic and your ass looks enormous in it, you’re never putting them on again,” reasoned Kors. “So I’m always thinking about the practical side of things. At the same time, if it’s only about practicality, it takes all the joy out of fashion and all the joy out of getting dressed — it takes the escapism out of it. And frankly, escapism is key.”
Hitting on the “Transformers” theme of the summit, Kors likened that escapism to the transformative nature of fashion in general. “I’ve always held onto the idea that fashion can transform you and transport you. It has the potential to change you, your mood and your life, quicker than anything else,” he said.
To wit: As a teenager growing up in Merrick, Long Island, Kors earned money doing caricatures at Sweet Sixteen and bar mitzvah parties, saving up for his first big luxury purchase, a Cartier Tank watch. “That watch changed everything that I wore. Somehow that watch seemed to take me places. When I wore it, suddenly I was transformed into a global jet-setter, living in a New York penthouse and dancing the night away at Regine’s,” he said.
Those early memories of the international jet set remain with Kors today and he still uses the phrase as a signifier for modern glamour. While air travel isn’t the singular experience it once was in the Fifties and Sixties, to Kors the jet set still conjures up the magic of Jackie Onassis in the South of France. It’s the essence of the dream he sells in his designs and his advertising. The company even sprinkles “jet set” into its Securities and Exchange Commission filings.
“When we started rolling out stores we wanted to create a jet-set experience that mirrored my design ethos. The jet-setters of the Sixties were really the first people that lived that fast life. They were the first people who needed clothes that could actually switch climates in a matter of hours,” said Kors. “They were the precursors to the supersonic lifestyle that prevails all around the world today. Now, you don’t have to live in the city today to live a fast life. Everyone is so wired up you can, in fact, live in Pocatello, Idaho, and still be on the move and always plugged in and know what is going on. Jet set means dressing for a quick, fast life. And that could entail a private plane, a bus or a subway. It just depends on who you are.”
That democratic view of the equality of transport modes hasn’t yet come to Kors’ advertising — which tends to stick with private-jet scenarios rather than mass transit — but the designer emphasized the importance of mixing high and low in his stores, as long as the low maintained an element of the Kors magic.
“When we opened our first lifestyle store in Dallas, everyone said, ‘You guys can’t put a flip-flop and a crocodile handbag in the same store. And I said, “Well, why not? It’s in your closet, why should it be any different in a store?’” rationalized Kors. “As a designer, I have to say I spend as much time designing something that’s accessible as I do something that’s over-the-top. It should be just as fabulous when it’s $89 as it is when it’s $8,900. It’s never about talking down to the customer. I’ve said before that the product is king. Well to me, consistently, the customer is always royal.”
Kors’ common touch and ebullient charisma have played a crucial role in developing the Michael Kors business. The designer credited his star turn as a judge for 10 seasons on “Project Runway” with bringing his appealing persona to a massive audience — and making consumers understand what the Michael Kors brand was all about.
“Seeing and hearing me on ‘Project Runway’ let people know how I think about fashion,” explained Kors. “You hear the person speaking, you know who they are, it connects the dots. It’s not just this magical garment or accessory that somehow arrives in your house from a stranger. You actually feel connected to the person who designs it.”
Since saying “auf Wiedersehen” to “Project Runway” last year, social media has only magnified Kors’ former reality television fame. “With people following me on Twitter or as Facebook fans or Instagram-ing, now it seems like I’m doing a trunk show in millions of homes worldwide every day,” said Kors. “And you know what? It’s as personal as when I do an actual trunk show on Fifth Avenue, Madison Avenue or Rodeo Drive. I’ve always had that connection to people. Now I just have it in a broader sense.”
It’s debatable whether an Instagram “like” is as personal as a face-to-face fitting in a Fifth Avenue trunk show, but the Internet and reality television have undoubtedly brought Kors a legion of younger fans to supplement his traditional Upper East Side-Palm Beach-Beverly Hills axis. “I think this generation of teenagers is going to start shopping very differently when they reach their 20s. I think they are going to have an aversion to the idea of disposable fashion,” predicted Kors. “We are going to see it circle back to a very old-school term, the idea of fashion as an investment.”
In his own youth, Kors was on the early fast-track to fashion fame. He operated his own “boutique” in his parents’ basement, dubbed “The Iron Butterfly,” where he sold his own handicrafts. As a teenager, he worked as a buyer for the pro shop at a Long Island tennis club, persuading lady clients to buy colorful outfits despite the all-white dress code. “I convinced all the women who were at the club that these clothes were great for wearing to the grocery store. And I have to say, to this day nothing thrills me more than seeing a woman in a tennis dress with a fur coat,” he reminisced.
While still a student at the Fashion Institute of Technology, Kors began working in 1978 at an upscale store on 57th Street, called Lothar’s — a shop he once dubbed “The Gap for Guinnesses.” Recognizing his talent and enthusiasm, the owners tapped Kors to design a full lifestyle range for the store, in addition to “helping Jackie O get her boots off and handing jeans to Nureyev in the dressing room.”
What followed is now Seventh Avenue lore: Dawn Mello, then fashion director at Bergdorf Goodman, spotted some of those Kors designs in Lothar’s windows and told him to come see her if he ever started his own line. “I literally ran home that night, started sketching out a collection and I whipped the whole thing together in three weeks and I took it up to see her,” said Kors. Needless to say, Bergdorf’s was soon carrying the new Michael Kors label and the rest is fashion history.
“I learned along the way. I waited three years, in fact, to have a fashion show. I wanted to make sure that I knew how to ship the clothes properly, that they fit well, that I had a clientele and that the quality was there. I wanted to work out the kinks — though you really never actually work it all out,” recalled Kors. “That’s how fashion progresses. You keep trying things and sometimes you’re right and sometimes your wrong. You’ve got to keep moving forward and you’ve got to try.”
John Idol, chief executive officer of Michael Kors, has been instrumental in steering the growth of the company. “The simple truth is we are all in the business of creative commerce,” said the designer, highlighting the virtues of cooperation between the financial and design counterparts of fashion firms. “If both parties realize that, then it’s symbiotic and that’s when it works. And when it works, fashion can be very big business.”
He should know. For fiscal 2014, Michael Kors is projected to ring up sales somewhere between $2.8 billion and $2.9 billion, up 27 to 32 percent from a year ago. As of June 29, the company operated 328 retail stores, including concessions, compared to 253 units a year ago. License partners operate another 114 retail locations.
On Tuesday, Michael Kors stock closed at $77.38, up 287 percent from its IPO price of $20 in December 2011.