Kors Sets Sights on Footwear Growth

NEW YORK — Expansion is the buzz word at Michael Kors, and the company is making some sweeping changes in footwear to maximize these plans.

The label last week announced it was ending its nine-year relationship with Schwartz & Benjamin, in favor of bringing the majority of production in-house and licensing its smaller and higher-end Michael Kors Collection with Milan-based Iris SpA.

The agreement with Schwartz & Benjamin runs through June, and the firm will continue to ship the collections created for Kors through the spring ’09 season, said Steve Shapiro, president of Schwartz & Benjamin.

The first Iris-produced Michael Kors Collection will debut for fall ’09, along with the in-house designs for Kors Michael Kors and Michael Michael Kors.

The move fits with Michael Kors’ efforts to position itself beyond the U.S. market and establish a strong international presence. A new Milan showroom is set to open in the coming months, and the firm plans to boost the total shop count to about 60 in the next year and to 100 over the next few years, said company CEO John Idol.

“When you have your own stores, you want to control things in-house,” Idol told Footwear News in an interview. “Our business is growing very rapidly, and retail is a very big focus for the company. We have some pretty aggressive international expansion plans, [and] retail is really the pinnacle.”

The footwear moves, Idol said, allow the company to make the most of the in-house design and management expertise already in place, while also elevating the high-end collection.

“Schwartz & Benjamin has been an amazing partner, so it was with heavy heart that we [decided] to come back in-house,” Idol said. “But we already produce about half in-house under Michael Michael Kors, so it made sense to work with our own team.”

The decision to partner with Iris — a subsidiary of Gibo SpA, which has created the Michael Kors clothing collection for 15 years — was based on the firm’s experience in creating higher-end, luxury footwear, Idol said. Iris will create four Michael Kors collections a year.

The Michael Kors Collection, which will likely have higher price points than in the past, will be made in Italy, whereas the Kors and Michael collections will continue to be produced in South America, Spain, Italy and China and will remain at about the same price at retail, Idol said.

Schwartz & Benjamin CEO Danny Schwartz told FN that ending the agreement made sense as both companies continue to grow.

“We signed the license several years ago, and [Michael Kors] was a smaller company back then,” Schwartz said. “It became clear after a while that their strategy had changed. … I wish them a lot of luck.”

Schwartz & Benjamin, meanwhile, has been making some changes of its own. In the last two weeks, the footwear powerhouse has taken on a license with luxe denim company Seven for All Mankind and named Shapiro, who has been with the company since 2000, its new president.

“[Shapiro’s] appointment strengthens our team so that I have a partner in executing our corporate strategy,” Schwartz said. “In guiding Schwartz & Benjamin through this challenging economic environment, [his] skill set will be indispensable.”

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