Thanks to a strong rise in shop openings – no less than 67 in the past 12 months – the American fashion label Michael Kors has upped its sales by 67.5% and even doubled its net profits. And the chain says this is only the beginning…
Strong fourth quarter, super 2013
“Our robust fourth quarter results were driven by continued strength across all of our business segments and geographies", said CEO John D. Idol. Quarterly sales were 57.1% higher at 597.1 million dollar (about 460.7 million euro), while comparable sales rose by an impressive 36.7 percent.
Thanks to the opening of 67 new shops in the past fiscal year (lifting the total to over 300 stores), retail sales rose by 58.8%. Wholesale sales rose by 59.4% and sales from licences (like glasses and watches) by 15.7%.
On its most important market, North America, sales improved by 52% to 517 million dollar (almost 400 million euro). In Europe, where Michael Kors currently has 44 shops, sales even doubled: +97% to 73 million dollar (56 million euro). In Japan, were the company has 22 locations and sales of about 7 million dollar (5.4 million euro), Michael Kors had a similar growth (+96%).
And so Michael Kors closed the fiscal year 2013 with a net profit of 397.6 million dollar (just over300 million euro) – double that of the previous fiscal year – and with annual sales of 2.18 billion dollar (1.68 billion euro), a rise of 67.5%. ““Fiscal 2013 was another outstanding year. Our jet-set luxury accessories and ready to wear are resonating with consumers worldwide”, says John D. Idol. Among those fans are famous people such as Gwyneth Paltrow and Alicia Keys.
Almost 300 more shops by 2014
Michael Kors also focusses on new shops in its current fiscal year (fiscal year 2014): in Europe there will be 40 new boutiques, in North America about 50 and in the Far East some 200. These new stores in China, South Korea, Singapore, Malaysia, Japan, Indonesia and the Philippines the company wants to open in cooperation with local partners.
It is not known how big of an investment this will be. Idol does however warn investors that the group will invest all of its future profits in the operational branch and in the expansion of the business, which means no cash dividends will be paid in the near future.
“We believe that the Michael Kors luxury brand is ideally positioned within the global luxury lifestyle market and we look forward to continuing to advance on our long-term objectives in fiscal 2014 and beyond.” The company predicts sales of 2.65 to 2.75 billion dollar (2 to 2.1 billion euro) for the current fiscal year.