Michael Kors Holdings Ltd. is still a growth story.
That’s according to chairman and chief executive officer John Idol, who was out sweet-talking investors at the Morgan Stanley Global Consumer Conference in Manhattan Tuesday.
Idol noted that the company’s seen a compounded annual growth rate of 37 percent on the top line since its 2011 initial public offering.
And while that might be top of the class for fashion — and worrying to some outside observers who see brand saturation and overexpansion — the ceo said there was more to come, particularly in e-commerce, men’s, Europe, Asia and watches.
“We are poised to continue to take market share,” Idol said. “We’re doing that through expanded brand awareness of the product and…we’re going to capitalize on our growing e-commerce business, which as you know was brought up [in] North America last year, and it’s been doing extremely well for us.”
The company is building out its European e-commerce business next year and then tackling Asia, two regions where Idol said the brand has a lot of potential.
He also touted product category growth amid a slowing handbag business.
“We’re entering the men’s business,” he said. “We have about 10 retail stores opening as we speak, and we have about 75 to 80 shops opening. We are very serious about the men’s business. We think that ultimately [that] will be [a] $1 billion business for the company.”
Between physical and digital geographical expansions and the men’s business, Idol said Kors could add another $2 billion in sales and push the company to revenues of $6.5 billion over “the next few years.”
That’s up from $4.2 billion last year.
Even so, the brand continues to face an uphill battle in some parts of its business, including the U.S., where it is most developed.
“Clearly the North American marketplace is feeling a slowdown and we see that in the shopping malls in North America, we’ve been talking about that for a year,” Idol said. “And a lot of business is being shifted to e-commerce….We are seeing bright lights of product innovation. [Our consumer] is responding to fashion, and we think we are on trend with that.”
And there are new troubles across the Atlantic following Friday’s terrorist attacks in Paris.
“Europe, unfortunately, I would have said up until Friday that we feel very, very confident, very strong,” the ceo said. “You have to understand that there’s been an event that, in particular, in France and probably Belgium, and some other countries is going to affect the retail environment for we don’t know what period of time.”
A lot of attention at Kors might be trained on the digital world — even the wearable tech space, which Idol said the brand would actively participate in next fall — but there’s still much to be said for physical retail.
“Over time we do believe that e-commerce will probably be 30 percent of our business,” Idol told investors. “But retail isn’t going away. Bricks-and-mortars are still out there. And I would like to remind everyone in this room that we make a lot of money in bricks and mortars, and I know that many of you have question why do we open retail stores, people still do shop at stores and we make a lot of money in retail stores, I would say, more than almost every one of our competitors in terms of four-wall [earnings before interest, taxes, depreciation and amortization].”