Michael Kors Will Close More Than 100 Stores

After opening more than 150 stores in 2016, the handbag maker says it failed to excite customers.
Michael Kors store closing

Amid declining sales, Michael Kors recently announced it would be closing 100 to 125 of its 827 stores over the next two years. While the closures are expected to save the brand an estimated $60 million per year, the announcement caused the company's stock to fall by 10%. Stock is now down 24% for 2017.

Too Many New Stores

Stories of brick-and-mortar retail's decline are nothing new. However, this announcement comes on the heels of a sizeable number of Michael Kors store openings; the company opened 159 retail locations in 2016. Though it's not clear how those locations performed, sales were down by 14.1% at locations that have been open for at least one year. Total revenue dropped sharply from $1.2 billion to $1.06 billion.

SEE ALSO: Which of Your Favorite Stores Are Closing?

Experts believe the company opened too many new stores too quickly. Attempting to capitalize on the handbag boom earlier this decade, perhaps Michael Kors diluted the luxury cache of its brand.

What Really Went Wrong?

Meanwhile, CEO John Idol attributed the company's struggles to lackluster shopping experiences. "Our product and store experience did not sufficiently engage and excite consumers," he said in a statement.

'Our product and store experience did not sufficiently engage and excite consumers.'

"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." Looking forward, the company sees 2018 as a "transition year."

What do you think readers? Will Michael Kors be able to bounce back? Sound off in the comments.

Stephen Slaybaugh
DealNews Contributing Writer

Stephen has been writing for such national and regional publications as The Village Voice, Paste, The Agit Reader, and The Big Takeover for 20 years. He covered consumer electronics and technology for DealNews from 2013 to 2018.
DealNews may be compensated by companies mentioned in this article. Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).


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1 comment
It's the store of course; it just couldn't be the merchandise.