Luxury retailer Michael Kors Holdings is planning to close between 100 and 125 stores over the next two years, due to declining sales.
Its total revenue decreased 11.2% to $1.06bn from $1.2bn in the fourth quarter of fiscal 2016, while its total revenue decreased 4.6% to $4.49bn in fiscal 2017 from $4.71bn in fiscal 2016.
Michael Kors Holdings chairman and chief executive officer John Idol said: “Fiscal 2017 was a challenging year, as we continued to operate in a difficult retail environment with elevated promotional levels.
“We acknowledge that we need to take further steps to elevate the level of fashion innovation in our accessories assortments and enhance our store experience in order to deepen consumer desire and demand for our products.
It is expected that the store closures will see the company spending between $100 and $125m of one-time costs.
Upon execution of the announced closures, the company estimates annual savings of $60m on an ongoing basis due to reduced depreciation and amortisation associated with these impairment charges.
Idol added: “Looking ahead, as we expand the fashion innovation in our accessories assortments, right-size our store fleet and elevate our store experience, fiscal 2018 will be a transition year in which we establish a new baseline before returning to long-term growth."
The current decision taken by the company in relation to operations downsizing comes after a series of closures enforced by retail companies this year, after decreasing sales and revenues amid competition from online retailers.
Footwear retailer Payless ShoeSource and fashion retailer rue21 are some of the companies that announced store closures last month.
As of 1 April, Michael Kors Holdings operated 827 retail stores, including concessions.
Image: A Michael Kors purse shop. Photo: courtesy of See-ming Lee via Wikipedia.