The Business Insider is reporting that Michael Kors has announced that it will shut down at least 100 stores due to poor and declining quarterly sales.
The mid-range luxury retailer total sales fell 11.2% with Michael Kors stores dropping 14% in sales.
The company has stated that it plans on closing 100 – 125 stores in an effort to reduce costs and to stop the haemorrhaging.
The reasons for the brand’s declining sales varies, but most insiders speculate that the brand’s initial strategy of always discounting their handbags has led to a decrease in customers perceived value of the brand. Essentially the brand has not given once-loyal customers a reason to continue shopping with the brand. Michae; Kors has lost some of their luxury appeal and once that’s gone it’s almost impossible to bring customers back to paying high non-discounted prices for their product.
Most of the sources reporting on Michael Kors are from the U.S. and we have yet to discover how this will impact Canadian Michael Kors fans. Once more information surfaces we will keep you updated. The interesting thing is that it seems there are so many brands that are forcing to scale back operations. What does the future of retailing in Canada look like? Only time will tell.
Source: Business Insider