Michael Kors to close more than 100 stores as it swings to fourth quarter loss

Michael Kors Holdings Ltd (NYSE:KORS) said it plans to close more than 100 of its full-price retail stores in the next two years as it swung to a fourth quarter loss.

Shares fell 10.31% to US$32.52 in early US trading. 

The retailer of clothes, handbags, shoes and fashion accessories expects the closures will save them about US$60mln a year as it struggles to turn around its brand following slowing sales.

The fashion label reported a net attributable loss of US$26.8mln, or 17 cents per share, in the last quarter ended 1 April, compared with net income of US$177mln, or 98 cents per share, a year earlier.

Total sales fell 11.2% to $1.06bn and comparable-store sales dropped 14.1%.

The company blamed an industry-wide slowdown in sales as more customers shop online and spend less on apparel.

“Fiscal 2017 was a challenging year, as we continued to operate in a difficult retail environment with elevated promotional levels,” said chairman and chief executive John D. Idol. “In addition, our product and store experience did not sufficiently engage and excite consumers.”

Kors also booked non-cash impairment charges of US$193.8mln related to its underperforming full-price retail stores.

In fiscal year 2018, Kors expects revenue of US$4.25bn, falling short of analysts’ forecasts of US$4.37bn. The group also guided towards a high single-digit drop in same-store sales for the fiscal year.

Story by ProactiveInvestors