Luxury accessories brand MCM sees $2 billion sales in five years
today Apr 22, 2016
MCM, the German accessories brand owned and run by one of South Korea's best-known female entrepreneurs, Sung-Joo Kim, aims to more than double sales to $2 billion within five years, tapping into shoppers' growing appetite for niche luxury brands.
The brand, founded in Munich in 1976 and known for its colorful $700 studded canvas backpacks, plans to expand in markets such as Japan and Europe and is looking to open outlets in major shopping hotspots including Paris, Kim told Reuters.
"We have not even explored the Japanese market yet, we are just starting there," she said in an interview on the fringes of the Conde Nast luxury conference in Seoul.
In recent years, big luxury brands such as Gucci, Prada and Louis Vuitton have lost some of their appeal to shoppers, who have been opting in greater numbers for smaller labels such as Balmain and Yves Saint Laurent, often with unconventional approaches.
Unlike many European brands, for example, MCM's image and style is not led by one star designer, but developed by an in-house team of stylists.
Its collection is also heavily loaded with logo-embossed products, whereas many brands such as Prada and Gucci have recently been selling more logo-free items.
MCM, whose prices are around the same level as brands such as Louis Vuitton and Celine, now makes around $700 million in annual sales - putting it on par with the likes of Versace.
South Korea is home the world's biggest duty-free market with about $8 billion in 2015 sales, and in such shops, MCM is the second-biggest fashion brand by sales after Louis Vuitton, Kim said.
Asked whether she would consider taking the company public, Kim said she was not interested.
"Money dictates money, I'm (a) more value-driven person," she said.
MCM makes around 60 per cent of sales in Asia and the rest in Europe, Middle East and America.
Its sales grew about 14-15 percent at constant currency in 2015, and Kim expected them to grow about 20 percent in 2016.
The youngest daughter of South Korean magnate Kim Soo-keon, Kim built her businesses from scratch. She gained experience in luxury working for U.S. department store Bloomingdale's and developing Gucci's South Korean business.
After licensing MCM in 1991, she bought the German brand from a Swiss financier in 2005. On her business cards, she calls herself MCM's Chief Visionary Officer.
Kim, who champions women's rights and is head of South Korea's Red Cross, said luxury shoppers were embracing mobile e-commerce and estimated that within five years, 15 to 20 percent of the brand's total sales could be generated online.
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