It's official: Michael Kors isn't cool anymore

Michael Kors has lost its status as one of the coolest brands in the industry.

The fashion brand's stock is underperforming, leading Morgan Stanley's analysts to remove Michael Kors from its "Best Ideas" list.

Shares are down 37% in the past year.

Michael Kors enjoyed a stunning rise in popularity in recent years thanks to its trendy handbags and watches. But lately, growth has been slowing, and the company has reported a weak outlook for the future.

So what went wrong?

Widespread popularity is the "kiss of death for trendy fashion brands, particularly those positioned in the up-market younger consumer sectors," industry expert Robin Lewis writes on his blog. Lewis compares Michael Kors to Tommy Hilfiger, which reached its peak in the late 1990s.

Michael Kors is considered an aspirational brand, with consumers paying a premium for its label. Once everyone has the product, it is no longer considered cool.

Other brands who have experienced this phenomenon include Juicy Couture, Jordache, and Coach.

Michael Kors also has several brands at different price points, a strategy that could easily backfire, Lewis says. Kors has a high-end department-store brand, a middle-market brand, and a brand for discount outlet stores.

"Some would argue all of those segments will simply end up competing with each other, thus cannibalizing the top end of the spectrum," he writes.

In other words, consumers won't pay $300 for a Michael Kors bag in a department store when they can get one at the outlet mall for half the price.