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How Michael Kors Caters to Increasingly Casual Consumers

Few things in life are certain, but you can be sure that a Michael Kors ad campaign will include a bronze-limbed model on or near a yacht, a private plane or a convertible. Forever inspired by the glamour of a jet-set lifestyle, the designer’s ideal woman has never been one to dress down.

And yet the explosion of athleisure at every price point hasn’t hurt the brand’s pocketbook. For the second quarter ended Sept. 26, total revenue increased 6.9% from $1 billion to $1.13 billion and retail net sales for the three-month period were up 7.5% to $532.8 million.

“We’re always listening to the customer,” Divvya Mathur, senior director of merchandising at Michael Kors, said recently at Editions, a speaker series hosted by the U.S. arm of technology firm Edited. “A shift we’ve seen in our business over the past year has been a shift into smaller bags and cross-bodies. I think the cross-body is really a result of this whole athleisure thing—it’s hands-free—and the mini bag is just a really great trend moment. So we started producing a lot more cross-bodies because it’s what the customer wants and we started doing some of our bestselling bags in mini versions.”

The problem with that, however, is that the brand’s standard tote bags range in price from roughly $198 to $398, while cross-bodies start at $148.

“It’s absolutely what the customer wants and we’re happy to give her that but at the same time, from a business perspective, we’ve traded into a lower price point,” Mathur shared, noting, “We’ve had to really think about strategies to say if she’s spending less on a bag, what do I get her to buy in addition to a bag.”

She added, “That’s really what makes a good merchant. Being able to know what your customer wants and being able to think about the business opportunities that arise from what the customer is telling you.”

Whatever those opportunities might be, she said, “whatever bucket of ideas” are being looked at, the brand makes sure to stamp everything with that distinctly Michael Kors point of view. “And I think that’s one of the things that’s defined success for this brand, really knowing who our customer is and what our customer aesthetic is,” she said.