Fashion company Michael Kors plans to shut down 100 to 125 stores of its 825-strong global store network in the next two years. The move is meant to increase the company’s profitability.
Major cuts
These closure should help save up to 60 million dollars (50 million euro) annually, even though it will cost 125 million dollars (110 million euro) at first. The company had just published its fourth quarter results, which showed an 11.2 % turnover drop to 1.06 billion dollars (950 million euro), when it revealed its intentions to shut down a part of its store network. Nevertheless, its 11.2 % turnover drop was still better than what analysts had expected. Like-for-like turnover plummeted 14.1 %.
The chain suffered a 26.8 million dollar net loss (24 million euro) in 2016’s fourth quarter, an enormous difference compared to the 177 million dollar (160 million euro) profit in the prior year. A large part of that negative result was because of one-time costs related to some of its onerous stores.
