Purse snatcher
Michael Kors secures the bag
Good morning, sartorial specialists. This is your Stock Market Rundown for August 24th, 2023. Thanks for joining me. Let’s dig in:
TODAY’S TOP STORY: BAG IT UP 👜
Back in the mid 2000s, the two trendiest handbag brands at the college cafeteria were Coach and Michael Kors. You had to pick a side—like Coke versus Pepsi, or the Red Sox versus the Yankees.
Both brands were chic enough that they were something a mid-2000s-era Paris Hilton might sport, but affordable enough that you could swing them on part-time Dairy Queen wages. Alas, Coach soon became a cautionary tale in how to wreck your luxury status.
Their outlet business, at first, was just somewhere to dump last season’s unsold totes and backpacks. But they got greedy. They aggressively expanded the outlet business, which cannibalized full-price retail.
This dulled their prestige luster. No well-groomed Upper East Side Range-Rover-driving soccer mom wants to be caught dead carrying the same purse as her nanny.
Coach regrouped by rolling up other luxury brands. Hey, once you have your Chinese manufacturing set up, why make a hundred handbags, when you can make ten thousand and drive down costs with scale?
Now, the unimaginable has happened: Coach and Michael Kors, the former rivals, have merged. Tapestry, the owner of Coach, Kate Spade, and Stuart Weitzman, is acquiring Capri Brands, the owner of Michael Kors, Versace, and Jimmy Choo.
The combined entity becomes the fourth-largest luxury company in the world. It’s like they’ve assembled a Voltron of faded mall brands. Can’t wait to see what shows up at the Niagara Falls outlet mall a few months from now.
SO WHAT ELSE IS GOING ON?
Big Beer wants out of craft brewing: Anheuser-Busch sold eight craft beer brands to a Canadian marijuana company. Just another symptom of the decline of overly-hoppy IPAs beloved by “beer nerds” who blast Mumford & Sons and have ironic mustaches.
Michael Burry, the quirky investor whose successful bet against the housing crash was adapted by Hollywood in the movie The Big Short, has bought over a billion dollars’ worth of put options on major indices—i.e., betting on a big stock-market downturn. Cheer up, Mike—haven’t you heard the economy’s gonna have a soft landing?
Nvidia, the semiconductor chipmaker, just reported quarterly results that blew the doors off. Nvidia’s H100 chips, used in AI applications, are as scarce now as toilet paper rolls were during the pandemic lockdowns.
Will folks in Tianjin eat cajun fries? Popeye’s Chicken thinks so—they plan to open 1,700 locations in China over the next decade. But they have competition: China already has 9,000 KFCs. You come at the Colonel, you best not miss.
That’s it for today, friends—see you bright and early tomorrow. Yours in capitalism, The Axe