Michael Kors to Close 100 to 125 Stores

While Bitcoin’s valuation is surging and the tobacco business is thriving, retail giants are struggling to compete in this new era of business. Retailers are facing a paradigm shift, as more people are buying items online rather than traveling to the store. Now, Michael Kors is reporting lower revenue due to under-performing stocks.

Luxury retailer Michael Kors is planning to close between 100 to 125 stores. During the fourth quarter, the company made a net loss, with the company’s total revenue decreasing by double digits. Now, the company expects same-store sales for the next quarter to continue to decline.

Following the news that the firm was operating at a net loss, shares of the stock fell more than 9 percent during Wednesday morning trading. Michael Kors posted a net loss of $26.8 million in the latest quarter. According to CNBC, the company had a net income of $177 million just a year ago.

Michael Kors Stores
London, England – February 19, 2017: Michael Kors luxury backbag in a store in central London. (Creative Lab / Shutterstock.com)

Michael Kors executives explained under-performing stores caused the net loss for the company. Moreover, total sales for the company dropped by 11.2 percent to $1.06 billion in the fourth quarter, which ended on April 1st.

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

Michael Kors Fashion Week
NEW YORK, NY – FEBRUARY 14, 2017: Natasha Poly walks the runway at the Michael Kors Fall Winter 2017 fashion show during New York Fashion Week at the Spring Studios (Ovidiu Hrubaru / Shutterstock.com)

Now, Michael Kors says it anticipates the company’s first-quarter sales of $910 million to $930 million along with a decline in same-store sales. Moreover, the company plans to buy back $1 billion of shares.

This news comes after Amazon reaches $1,000 share price on Tuesday. The e-commerce giant’s share price doubled in less than two years.