Michael Kors Holdings Ltd. (KORS), the luxury-goods maker and retailer, aims to more than double its Greater China stores by the end of the year as the clothing market surges.
Shops in China, Hong Kong, Macau and Taiwan will jump to 15 by the end of this year from seven now and may gain to more than 100 over the next three to five years, Chief Executive Officer John Idol said yesterday.
Kors, named for founder and Chief Creative Officer Michael Kors, joins competitors including Prada SpA and Paul Smith Ltd. in planning expansions in the world’s most populous nation. The clothing market is forecast to more than triple to 1.3 trillion yuan ($206 billion) by 2020 from 2010 as rising incomes fuel demand, the Boston Consulting Group Inc. said in a report in July.
“The Chinese market continues to be exciting and explosive both at the same time,” Idol said in an interview in Shanghai. “Chinese consumers understand luxury and they also understand improving life.”
Michael Kors entered China with a shop in Tianjin last summer, then added outlets in Beijing, Shanghai and Suzhou. It also has locations in Hong Kong, Taipei and Macau. A 534-square- meter (4,750 square-foot) flagship store is scheduled to open in downtown Shanghai in the spring of 2013, the company said. The company’s signature label Michael Kors sells products including a $2,595 Safari Woven Embossed Tote, while its MICHAEL Michael Kors has a line up that includes $124 Tie-Dye Ribbed Sweaters.
“Business is good” at existing China stores, Idol said, declining to give more details. The 53-year-old executive joined Michael Kors in 2003 after running Donna Karan International Inc. and Ralph Lauren.
Shares of Kors have more than doubled since its December initial public offering and closed at $40.75 on May 15 in New York. Investors “are responding to the fact that we are a high- growth, luxury lifestyle retailer with the ability to have significant growth over the next five to ten years,” Idol said.
Prada raised about HK$19.2 billion ($2.5 billion), including an overallotment, in a Hong Kong share sale in June to fuel expansion in China. Florence, Italy-based Salvatore Ferragamo SpA plans to enter as many as eight new cities over the next three to five years in China.
Michael Kors operates more than 230 outlets in 74 countries as of the end of 2011. It has principal executive offices in Hong Kong, while designer Kors, who is the chief creative officer, leads a New York-based team that is responsible for the company’s products.
The company is planning to start a website for China around 2014 and is looking at South American countries for store expansion, Idol said.
To contact Bloomberg News staff for this story: Michael Wei in Shanghai at firstname.lastname@example.org
To contact the editor responsible for this story: Stephanie Wong at email@example.com