Michael Kors Holdings Ltd. joined the list of retailers who are reducing the number of their retail outlets. For two years, the retail chain of the luxury shoe and accessories brand, founded by American designer Michael Kors, has been reduced to 100-125 stores, writes U.S. footwear news, citing the holding’s fourth-quarter earnings report.
According to John Idol, head and CEO of Michael Kors, due to the large number of promotions, the company's sales in the fourth quarter decreased by 11,2% to $ 1.06 billion.
“The fiscal 2017 year was difficult because we had to work in a difficult situation for the retail business, with increased advertising costs,” Idol said. “We recognize that we need to take further steps to increase the level of innovation in the field of fashion in our accessory collections and work on a retail concept in terms of customer satisfaction and increased demand for our products.”
In addition to store closures, the company gave a disappointing forecast - in the first quarter of 2018, the holding’s total revenue could amount to $ 910 million - $ 930 million, which is lower than analysts had expected earnings of $ 950 million.
Throughout the year, the company predicts revenue of $ 4,25 billion.
According to the management of 2018, the year should be a transition year for the company when a new base level is created, after which a return to steady growth is expected.
It is assumed that the closure of retail outlets will provide businesses with savings of about $ 60 million per year.