Michael Kors shares plunged
November 9,2018
By ELEANOR CHAMBESHI,LUSAKA
According to BBC,Shares in Michael Kors plunged on Wednesday following weaker-than-expected sales at its namesake brand.
Sales at Michael Kors stores open for at least 12 months fell 2.1%, while licensing revenue was down almost 7%.
The US fashion firm has responded to the struggles at its core brand by taking over luxury European labels Versace and Jimmy Choo.
However, the benefits of those multi-billion dollar acquisitions are yet to be seen.
Profits for Michael Kors sank 37% to $137.6m for the three months to 29 September compared with the same period last year.
Total revenue was up 9% to $1.3bn, boosted by last year's takeover of Jimmy Choo, the British luxury footwear maker made famous by Sex and the City, for almost £900m.
But at Michael Kors - which accounts for the bulk of the firm's business - total revenue from retail, licensing and wholesale was roughly flat, while sales at stores in Europe fell by 10%.
The firm blamed the declines partly on overly aggressive efforts to limit stock, as it tries to cultivate a more exclusive, luxury image.
"The consumer is absolutely responding to the brand," chief executive John Idol said. "We've got to get more inventory into the stores to be able to really build consumer demand."
Shares were down 14% at $49.42 in afternoon trading in New York.
The firm's acquisition of Versace - announced in September and expected to be completed in the next six months - will position the company for growth over the long term, he added.
The company, to be renamed Capri Holdings, plans to boost spending on marketing and open new Versace stores, with the goal of more than doubling the brand's annual revenue to $2bn over the next few years.
By ELEANOR CHAMBESHI,LUSAKA
According to BBC,Shares in Michael Kors plunged on Wednesday following weaker-than-expected sales at its namesake brand.
Sales at Michael Kors stores open for at least 12 months fell 2.1%, while licensing revenue was down almost 7%.
The US fashion firm has responded to the struggles at its core brand by taking over luxury European labels Versace and Jimmy Choo.
However, the benefits of those multi-billion dollar acquisitions are yet to be seen.
Profits for Michael Kors sank 37% to $137.6m for the three months to 29 September compared with the same period last year.
Total revenue was up 9% to $1.3bn, boosted by last year's takeover of Jimmy Choo, the British luxury footwear maker made famous by Sex and the City, for almost £900m.
But at Michael Kors - which accounts for the bulk of the firm's business - total revenue from retail, licensing and wholesale was roughly flat, while sales at stores in Europe fell by 10%.
The firm blamed the declines partly on overly aggressive efforts to limit stock, as it tries to cultivate a more exclusive, luxury image.
"The consumer is absolutely responding to the brand," chief executive John Idol said. "We've got to get more inventory into the stores to be able to really build consumer demand."
Shares were down 14% at $49.42 in afternoon trading in New York.
The firm's acquisition of Versace - announced in September and expected to be completed in the next six months - will position the company for growth over the long term, he added.
The company, to be renamed Capri Holdings, plans to boost spending on marketing and open new Versace stores, with the goal of more than doubling the brand's annual revenue to $2bn over the next few years.