Michael Kors Holdings Ltd. announced during an earnings call that it will be closing 100 to 125 full-price stores over the next two years. This will save the company about $60 million annually, however, the designer handbag and accessories brand expects to incur about $100 million to $125 million in one-time charges. Michael Kors had 827 full-price or outlet stores and another 133 licensed stores for a total of 960 worldwide when its fiscal year ended April 1. The company’s comparable-store sales fell 14.1 percent in the fourth quarter (ending April 1).
Total Retail’s Take: Michael Kors is yet another mall-based brick-and-mortar retailer that has been facing slowing sales as consumers increasingly shop online and spend less on apparel and accessories. The luxury retail sector has been especially turbulent lately — Coach recently acquired Kate Spade, and Jimmy Choo put itself up for sale. Retailers need to offer shoppers more of an experience to get them into their stores, particularly for high-end brands like Michael Kors.