US giant Michael Kors revealed plans to close up to 125 stores over the next two years as it reported a fourth quarter loss and a sharp drop in sales.
The group posted a pre-tax loss of $26.8m compared to a profit of $177m in the comparable period last year, while sales dropped from $1.2bn to $1.06bn.
Like a number of premium US brands Michael Kors, whose empire stretches from handbags to watches and fragrance, has suffered from over-exposure and a reliance on the struggling US department stores which have discounted its product.
Chairman and chief executive John D Idol admitted the brand had had a “challenging year” and needed to work harder on improving the quality and innovation in its products, and improve in-store experience. “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,” he said.
The business, which is headquartered in New York, has said that it would close between 100 and 125 of its full-price retail stores over the next two years. The closures would result in it taking a charge of between $100m and $125m but would yield savings of $60m a year it said.
Michael Kors had 827 stores around the world (including concessions) on 1 April, compared with 668 the year before. An additional 133 Michael Kors stores are run by licensees.
