On Monday's MarketFoolery, host Chris Hill, Motley Fool One analyst Jason Moser, and Stock Advisor Canada analyst Taylor Muckerman check out Michael Kors (CPRI 1.18%) and Coach (TPR 2.03%) at the outlet mall.
Tweeting to MarketFoolery, @ShooterF16 asked of Michael Kors:
$kors next to $coh at an outlet mall in Vegas. Are the margins going to disappear for MK? @MarketFoolery pic.twitter.com/8esX6y7FA8
— Shooter (@ShooterF16) July 13, 2014
Chris thinks the concern is legitimate for any retailer that's done well at the high end of the spectrum and moves to the low end. Jason agrees that margins run a risk of taking a hit and explains how that can happen when a company resorts to coupons, lower prices, and other deals. Jason encourages investors to move away from Coach but thinks that eventually Michael Kors will be hit too. He encourages investors to learn from Coach and find their risk tolerances. Taylor suggests investors look to investing in outlet markets.
