Luxury brand Michael Kors Holdings plans to close 100 to 125 stores over the next two years as the retailer tries to expand its Asia presence and adjust to an industrywide trend of shoppers buying things online rather than in person.
The London-based retailer said Wednesday that it has not yet disclosed which locations will be closed and when. As of April 1, Michael Kors had 827 stores, according to the company. That was up from 668 stores the same time last year.
The retailer said it expected to save about $60 million a year as a result of the closures.
In an earnings call early Wednesday morning, Michael Kors Chief Executive John Idol said the closures will enable the brand to focus on its most productive locations.
He said the company also plans to open new stores in “key cities” and will focus on expanding the company’s footprint in Asia, where it plans to open 50 new stores this year. The retailer also intends to renovate about 100 of its existing stores, mostly in North America, over the next two years to better showcase products.
“We believe in our retail fleet. We think it’s critical to our business,” Idol said on the call. “We think that the key to success there again revolves around product, and revolves around the store environment and creating excitement.”
Luxury brands have not been immune to the changing retail landscape, as shoppers choose to browse and buy online rather than visiting stores in malls, said Britt Beemer, chairman and founder of consumer behavior firm America’s Research Group.
Ten years ago, high-end consumers would shop at malls about 20.5 times a year, he said. That same demographic today is visiting malls about 11.5 times a year.
High-end consumers say it takes an increasing amount of time to visit malls and then get home, Beemer said, “and they just don’t want to waste time.”
“That’s where I see to be a challenge,” he said.
Michael Kors shares closed Wednesday down $3.09, or 8.5%, at $33.18. They have dived 22% over the last 12 months.
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2:45 p.m.: This article was updated with a closing stock price.
The original article was published at 9:40 a.m.