In a nutshell:
Michael Kors plans to cut up to 125 stores over the next two years. The news comes as the company reports plummeting revenue and sales for the fourth quarter and full 2017 fiscal year, ended April 1. As a result, the brand is officially in transition mode. The company, which had been rumored to be in hot pursuit of Kate Spade, had been going strong, gaining momentum during the recession by outplaying rival Coach with its own accessories game. Now, like Coach, the brand is in need of a product, store and distribution overhaul. It has already starting pulling back from department stores, and the heavy promotions found there, and looking to online for a lifeline.
Revenue decreased by 11.2% to $1.06 billion in the fourth quarter (including activity in the 53rd week) from $1.20 billion during the prior year period.
Total revenue in the Americas plummeted by 18 percent to $721.0 million while European sales didn’t fare much better with a 15.3% drop to $215.2 million. Asia, on the other hand, was up 96.3% to $128.6 million.
Total revenue for the year decreased by 4.6% to $4.49 billion to $4.71 billion for the previous year.
Gross profit was down by 11.1% to $619.7 million and gross margin was flat year on year at 58.2%.
Comparable sales dropped by 14.1%, while analysts had comp stores pegged at a 13.4% decline, according to Reuters.
Retail net sales increased 0.5% to $575.3 million, a boost attributed to 159 store openings since the prior year period, including bringing 111 stores in house which had previously been licensed in China. Wholesale net sales dove by 22.8% to $456.1 million. Licensing dipped by 6.2% to $33.4 million.
Chairman and CEO John D. Idol acknowledged to the company’s missteps in a statement, saying “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.” He called FY2018 “a transition year.”
Retail sales growth picked up in July compared to recent months, helped by strength in e-commerce and by a slight recovery in department store sales.Read more
Retail giant Amazon rolls out a new way for shoppers to get instant gratification from their online orders and tangles with Trump over state sales taxes.Read more
Now that NAFTA negotiations have officially started, it looks like the trade deal may come far from the one we've known for the last 23 years.Read more
The seven variables that allow apparel businesses to balance performance and vulnerabilities by effectively identifying, assessing, mitigating and managing their supply chains.Read more
Consumers are starting to reward Target for its work to transform its product, customer experience and fulfillment offerings.Read more
Consumer interest in brick and mortar shopping seems to be picking up, or at least declining at a slower rate, according to the most recent store foot traffic data released by analytics firm Retail Next. It may be a glimmer of hope for physical retailers amid the……...Read more