Michael Kors has announced that it will be closing between 100 and 125 stores as sales at the brand decline.
According to an article on The Fashion Law, Michael Kors has announced that it will be closing between 100 and 125 stores within the next two years. The brand also said sales declined by 14.1% for the forth quarter fiscal 2016.
Sales at Michael Kors have decline by 14.1% in Q4 while revenue declined this year by 11.2% to $1.06 billion. That’s compared to $1.20 billion in Q4. For the year, revenue declined by 4.6% to $4.49 billion compared to $4.71 billion in fiscal 2016.
The brand did not specifically say which stores it would be closing. Michael Kors has 827 stores compared to the 668 stores it had last year. The stores to be closed will be full priced stores and will not include any outlets stores. The brand also did not say how many jobs will be cut from the store closings.
Chairman and CEO John D. Idol released a statement saying,
“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.”
The company says it expects to save about $60 million a year from the store closings.
Michael Kors also said it would be lowering inventory in department stores. Much in the way Coach said it would lower inventory in overly promotional department stores last year.
Sales at department stores have been declining for a while now. So, lowering inventory in those stores would probably make sales and profits increase at the brand. Closing outlet stores would probably makes sales increase as well.
So, way do you think? Will sales and profits increase at Michael Kors? Let me know in the comments below. Also, don the forget to subscribe to get new posts sent directly to your inbox and follow me on Facebook, Instagram, and Snapchat.
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