Michael Kors to close 100 to 125 stores over next two years
Luxury fashion retailer Michael Kors has announced that it will close between 100 and 125 stores over the next two years as it looks to increase profitability across its store estate.
The company has reported that total sales fell by 11.2% to $1.06 billion in its fourth quarter while comparable store sales declined by 14.1%. It also swung to a net loss of $26.98 million compared to a profit of £$177 million in the same period in the previous year.
At the end of the quarter on 1 April, Michael Kors operated 827 retail stores, including concessions, compared to 668 at the end of the same prior year period. The company also had 133 retail stores and concessions operated through licensing partners.
Commenting on the performance, John Idol, Michael Kors chairman and chief executive, said: “Fiscal 2017 was a challenging year, as we continued to operate in a difficult retail environment with elevated promotional levels. In addition, our product and store experience did not sufficiently engage and excite consumers. We acknowledge that we need to take further steps to elevate the level of fashion innovation in our accessories assortments and enhance our store experience in order to deepen consumer desire and demand for our products.”
For the current financial year, the company expects total revenue to be approximately $4.25 billion and comparable sales to decrease in the high-single digit range.
Idol added: “Looking ahead, as we expand the fashion innovation in our accessories assortments, right-size our store fleet and elevate our store experience, fiscal 2018 will be a transition year in which we establish a new baseline before returning to long-term growth. We have a strong brand, led by Michael Kors, with a history of fashion innovation and leadership, a global footprint with stores positioned in the best locations around the world and the marketing expertise to effectively convey our fashion stories.”
