In a federal trial on Monday, renowned fashion designer Michael Kors shared insights into the growing difficulties of staying competitive in a world dominated by social media trends and celebrity endorsements. Kors pointed to platforms like TikTok and influencers such as Taylor Swift and Beyoncé as major drivers of consumer behavior, with viral moments dictating brand success or failure.
Michael Kors Testifies in Antitrust Trial Over Tapestry’s Acquisition of Capri Holdings
Kors’s testimony came as part of an antitrust trial concerning the Federal Trade Commission’s (FTC) efforts to block Tapestry’s proposed $8.5 billion acquisition of Capri Holdings. This deal would unite six major fashion brands under one company, including Coach, Kate Spade, Versace, and Michael Kors. The FTC claims that this merger could reduce competition and lead to price increases for customers.
The Rise and Fall of Brands in the Social Media Era
Kors acknowledged that even established brands like his own can experience declines in popularity, noting, “Sometimes you’ll be the hottest thing on the block. Sometimes you’ll be lukewarm. Sometimes you’ll be cold.” He admitted that his label has suffered from “brand fatigue” and is in need of a refresh to regain consumer interest.
Impact of Celebrity Endorsements and Social Media
Kors emphasized how quickly trends change, highlighting an incident where a lesser-known brand, Aupen, became instantly popular after Taylor Swift was spotted with one of its handbags. This viral moment caused Aupen’s website to crash due to high traffic, illustrating the strong influence of celebrities and social media on purchasing decisions.
Concerns Over Market Consolidation
The FTC argues that the Tapestry-Capri merger, particularly with Coach and Michael Kors under one owner, could create a dominant force in the handbag market, reducing competition. On the other hand, attorneys for the companies claim that competition remains robust, with the rise of luxury brands, fast fashion, and online marketplaces giving consumers a wide range of options.
Retail Struggles Due to Brand Dependency
Former Macy’s CEO Jeff Gennette testified about how overreliance on the Michael Kors brand negatively affected sales at the department store. He explained that Macy’s suffered financially due to excessive markdowns of Michael Kors products, contributing to the brand’s decline during his tenure.
Trial’s Conclusion Could Shape Fashion Industry’s Future
The trial is set to conclude soon, with economists providing final testimony. The decision could significantly impact the fashion industry, determining how brands operate in a marketplace increasingly influenced by social media and consumer demand for innovation.