Michael Kors plans to close up to 125 stores

Los Angeles Times - - BUSINESS BEAT - By Samantha Ma­sunaga samantha.ma­sunaga@la­times.com

Lux­ury brand Michael Kors Hold­ings plans to close 100 to 125 stores over the next two years as the re­tailer tries to ex­pand its Asia pres­ence and ad­just to an in­dus­try­wide trend of shop­pers buy­ing things on­line rather than in per­son.

The Lon­don-based re­tailer said Wed­nes­day that it has not yet dis­closed which lo­ca­tions will be closed and when. As of April 1, Michael Kors had 827 stores. That was up from 668 stores the same time last year.

The re­tailer said it ex­pected to save about $60 mil­lion a year as a re­sult of the clo­sures.

In an earn­ings call early Wed­nes­day morn­ing, Michael Kors Chief Ex­ec­u­tive John Idol said the clo­sures will en­able the brand to fo­cus on its most pro­duc­tive lo­ca­tions.

He said the com­pany also plans to open new stores in “key cities” and will fo­cus on ex­pand­ing its foot­print in Asia, where it plans to open 50 new stores this year. The re­tailer also in­tends to ren­o­vate about 100 of its stores, mostly in North Amer­ica, over the next two years.

“We be­lieve in our re­tail fleet. We think it’s crit­i­cal to our busi­ness,” Idol said on the call. “We think that the key to suc­cess there again re­volves around prod­uct, and re­volves around the store en­vi­ron­ment and cre­at­ing ex­cite­ment.”

Lux­ury brands have not been im­mune to the chang­ing re­tail land­scape, as shop­pers choose to browse and buy on­line rather than vis­it­ing stores in malls, said Britt Beemer, chair­man and founder of con­sumer be­hav­ior firm Amer­ica’s Re­search Group. Ten years ago, high-end con­sumers would shop at malls about 20.5 times a year, he said. Today they visit malls about 11.5 times a year.

High-end con­sumers say it takes an in­creas­ing amount of time to visit malls and then get home, Beemer said, “and they just don’t want to waste time.” “That’s where I see to be a chal­lenge,” he said. Michael Kors shares closed Wed­nes­day down $3.09 at $33.18. They have dived 22% over the last 12 months.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.