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The France based luxury conglomerate, LVMH, is reportedly considering acquiring American leather goods brand Michael Kors, after it sold one-third of its stake in Kors back in 2003.
After posting disappointing second quarter earnings, shares in Michael Kors Holdings dropped 5% as a number of Wall Street analysts downgraded the company. Shares did momentarily go up following a report which suggested that LVMH Moet Hennessy Louis Vuitton SE could acquire the company. Neither company have commented on the rumours of acquisition.
LVMH had a one third stake in Kors back in 1999, while Michael Kors himself held the role of Creative Head of Celine, also owned by LVMH, before selling it off in in January 2003.
Michael Kors’ recent financial release show second quarter revenues declined 4% year-on-year to US$1.09 billion, and net income dropped 17% to US$161 million; broadly meeting analysts' expectations.
Just like the U.S leather shoes and accessories brand, Coach, Michael Kors handbags have often benefitted from important price discounts making it less desirable and discrediting its luxury brand image. It is also argued the new generation of consumers are less attracted to big logos and flashy gold trappings.
Other speculations of merger between medium-premium luxury brands include Burberry and Coach. Read more here.
Source: Bloombergcomments powered by Disqus