Michael Kors said Wednesday it will close 100 to 125 full-price stores over the next two years. The company had 827 retail locations as of April 1.
The closures are intended to improve profitability, Michael Kors said. The retailer anticipates ongoing annual savings of $60 million as a result of this plan but will record a $125 million charge.
“Our product and store experience did not sufficiently engage and excite consumers,” Chairman and Chief Executive John Idol said in a statement.
“We need to take further steps to elevate the level of fashion innovation in our accessories assortments and enhance our store experience,” Idol added in the statement.
The company has also said that, going forward, it will concentrate more on the burgeoning markets in Asia.
Total sales dropped 11.2 percent, to $1.1 billion, in the fiscal fourth quarter ended April 1 — while comparable store sales fell 14.1 percent.
The company lost $26.8 million in the quarter compared with net income of $177 million a year earlier.
Management also gave a bleak outlook for the upcoming year.
Shares of the luxury fashion company, which also swung to a fourth-quarter loss, fell more than 6 percent to $34 in pre-market trading on Wednesday. The company said it expected revenue of $4.25 billion for fiscal year 2018, while analysts had estimated revenue of $4.37 billion. Michael Kors also forecast a high single-digit drop in same-store sales for the fiscal year.