A Michael Kors model flaunts the designer's latest look in January. Photo: CFP

Michael Kors accessories Photo: CFP

 

Men willing to spend more on their appearance and a seemingly free-flow of new, stylish must-have accessories in time for the holiday season are all helping to build fashion icon Michael Kors' ever-expanding empire.

Michael Kors, controlled by fashion designer and former Project Runway TV show judge Michael Kors, is one of the fastest-growing companies in the luxury and so-called "affordable luxury" segments.

And the company - which shares have more than tripled since it went public in 2011 - plans to keep momentum going by opening about 100 stores in 2014 as demand for luxury goods such as its trendy handbags and watches shows no sign of fading.

Stronger appetites

Indeed, signs of economic recovery in the United States and Europe have helped to increase demand for affordable luxury items, helping companies such as Michael Kors, Fifth & Pacific Cos Inc's kate spade, Fossil Group Inc, Estee Lauder Cos Inc and privately owned Tory Burch.

Men are also spending more on luxury nowadays, which has further encouraged companies like Michael Kors to step up investments.

"By driving a frequent flow of new and innovative products through its own stores and wholesale shops, the company is generating consumer excitement in a way we've never seen in the luxury accessories category," said Omar Saad, an analyst at research firm ISI Group said Tuesday.

The company's handbags, which sell for $200 to $3,000, while watches are priced at between $150 and $550, are among the accessories and apparel that have been spotted on First Lady Michelle Obama and celebrities such as Jennifer Lopez - adding to the popularity of the brand.

Under its affordable luxury brand, MICHAEL Michael Kors, the company offers products similar to those at its high-end brand, KORS Michael Kors, but at a cheaper price.

Piper Jaffray analyst Erinn Murphy said the holiday season should give sales a further boost.

"I think the brand has a lot of key product catalysts that should help them during the holiday season," said Murphy. "Fragrance, jewelry, watches and handbags are all going to be very strong gift-giving items in the holiday season."

Aggressive expansion

The company has been growing at a blistering pace and is aggressively expanding in the United States and Europe.

Michael Kors has also increased its presence in department stores, including Macy's and Nordstrom.

The company said Tuesday it would continue to expand, spend on building its brand and employ more people even if it had to sacrifice margins moderately.

"We would rather invest in the company over the next three-plus years, even if that meant the operating margin declined slightly," said Chief Executive John Idol.

Kors' success has hit Coach Inc particularly hard. The rival company, known for its Poppy handbags, reported a 7 percent fall in same-store sales in North America in the latest quarter.

The company now has a market capitalization of more than $15 billion, about the same as industry stalwart Ralph Lauren Corp.