Neil,
I’ve been thinking about KORS for a while and have not made a decision whether this is a contrarian opportunity or Buffett’s ‘buying fair company at a wonderful price.’
My sense is that decline in SSS is already priced-in, (perhaps oversold) but we need to really understand this sector for future projection.
KORS operates in an industry where things change very quickly. Fads come and go, and that’s how I see it. To confirm my understanding, I’ve been asking around group of lady friends who are very knowledgeable and sensitive in fashion changes. They agree that KORS is ‘kind of yesterday’ and hot new designer bags are out there taking some of KORS market. (i.e. Tory Burch) However, I think it’s too early to say KORS is following Coach. KORS may come back to become the hot trend once again, but it’s though to do so in its business environment.
I really like what numbers are telling me, but not what my ‘experts’ told me about KORS. I’m probably biased because of what they said but I think it adds color to KORS future growth and is a good starting point to continue my KORS homework.
Hex