By mid-day the stock price for Michael Kors Holdings Limited (KORS) gained an impressive 10.98 percent, currently at $63.26. The Hong Kong company, brainchild of New-York born fashion-designer extraordinaire Michael Kors, does not seem to be slowing down any time soon.
Kors, a fashion-school dropout, is widely known for his five-year stint as a judge on the hit television program “Project Runway”, but is just as well if not even better-known for the fact that his designs have adorned some of the world’s most famous and/or powerful people, from Alicia Keys at her performance at the Presidential inauguration ball last month to the first Lady herself, not to mention scores of other celebrities such as Heidi Klum, Gwyneth Paltrow, Rene Russo, and Jennifer Garner.
But recognition and fame cannot account for KORS’s impressive numbers since the company went public on the New York Stock Exchange back in December of 2011. In just a little over a year, the stock is very near triple its IPO price of $25, has a market cap of $11.39 billion, and sales of $1.70 billion. The year-to-date performance is up 11.70 percent, and the earnings-per-share ratio is projected for the next year at 32.05 percent (this year it is already up a massive 161.65 percent), and there is room to grow.
A shrewd sales plan can be credited for much of this success. With its own stores, as well as a large store-in-store presence in high end department outlets, KORS has been able to capitalize off of selling tasteful and moderately-priced products (considering the quality and design, not to mention label recognition), to a growing class of consumers with incomes ranging from 100 to 250k per year. Research suggests that this is a group with money to spend, but not on products that are aesthetically ostentatious or outrageously-priced. KORS, for the time being, seems to have figured out how to keep its finger on the pulse of these particular consumers.