This blogs picks up M&A for Tapestry, which owns American luxury brnad COACH. How do you feel when you read this article ? Maybe, main question is‥‥

MICHAEL KORS will disappear ?

Conclusion is

“NO”

Reason

1. Characteristic for Luxury Brand M&A

（１）No merit for “unified” brand

Each brand has different history and story. And they are also sold to customer with product itself. For example, if Louis Vuitton merges Cartier and Cartier’s products logo change to Louis vuitton, Cartier’s cusotmer anymore will not buy them.

The reason is Cartier’s customer loves Cartier’s history and story.

So, the main strategy post-M&A at luxury industry, keep brand and the investment of marketing and store renovation increaes.

（２）Rather demerit

If brand is unified, it is confusing for customer and it leads to huge drop of sales.

The good example for this point is another luxury congromelete, Richemont. The entity name is Richemont, but at each store, the name of brand Cartier or Van Cleef & Arpels is shown. So, few people knows that Cartier and Van Cleef & Arpels are under the same entity.

Post-M&A strategy

MICHAEL KORS Brand remains

Aim to LVMH group

According to article, new Tapestry group is focusing on international luxury congromelate, LVMH. However, I am quite skeptical about it. LMVH has quite great product portfolio, Fashion, Watch & Jewellry, Liquor etc. And even if the same fashion category, Louis Vuitton, Dior, Loewe are slightly different customer target and average price and focusing on the wealthy.

On the other hand, even if Tapesry acquisites MICHAEL KORS, price range and custoemr layer are very very close. Aditionally, looking at product portfolio, most of all is “Fashion” so not balanced comapred with LVMH.

Closure of stores or Increase price range

COACH and MICHAEL KORS already have a lot of stores. So after M&A, maybe the number of stores will decrease to focus on profitability. At the same time, they try to increase price range like Tiffany of LVMH group. While, the most difficult point is, whether Tapestry group appeals rationality of price increase toward cusotmer.