Michael Kors buoyant as turnaround efforts progress
Michael Kors' strategy to promote luxury handbags and cut discounting is showing some success.
Michael Kors Holdings Limited announced on Tuesday (08Aug17) the financial results for the first quarter, with it reported that total revenue dropped by 3.6 per cent, to $952.4 million (£732 million) from $987.9 million (£759 million).
In spite of the decline in sales, the drop-off was smaller than anticipated, as it appears turnaround strategies implemented in recent years are now starting to pay off.
Chief executive officer and chairman John D. Idol commented that the results were driven largely by better than anticipated retail comparable sales results in both North America and Europe.
"While it is still early in the process, we are making meaningful progress enhancing our assortments, deepening our connection with consumers, and elevating our jet set luxury experience in our stores and digital flagships," he said in a statement.
In addition, Idol explained that he is excited about the recent acquisition of Jimmy Choo for $1.2 billion, and shared that he is planning even more fashion deals in the future.
"We believe that the development of a global fashion luxury group will increase long-term shareholder value as we create a more diverse product portfolio, increase our exposure to international markets and unlock additional opportunities for future growth," he explained.
In spite of a plan to close up to 125 boutiques over the next two years, Kors ended the first quarter with 67 more stores than it had a year prior, a total of 838.
Meanwhile, Ralph Lauren Corporation has also posted its results with revenue in the first quarter decreasing 13 per cent to $1.3 billion. But the brand was pleased to find lower discounting and less reliance on department stores appeared to be working, in accordance with the Way Forward plan launched last year.
And designer and executive chairman Lauren was pleased to be working with new chief executive officer Patrice Louvet on new initiatives.
"We are both committed to preserving the essence of our brand while actively evolving it to renew long-term growth. Our experiences and expertise will be a powerful and winning combination," he added.