by Apparel Resources News-Desk
09-August-2019 | 2 mins read
Michael Kors, an iconic luxury retailer, is facing slowing demand in stores and multi-brand outlets.
Consequently, its parent company, Capri Holdings Ltd., has missed quarterly revenue estimates and reports a lower full-year sales forecast.
Michael Kors, which accounts for the bulk of the company’s sales, depends heavily on retail rather than online. Hence, the brand struggles along with many others in its league as more and more shoppers turn to e-portals and footfall decreases in stores.
A research by analysts from Jane Hali & Associates, has revealed that the demand for handbags, the best-selling category for Kors, is on a decline as consumers are turning towards trendy fanny packs and backpacks.
The luxury retailer has also pushed full-price sales in its stores by withdrawing discounts on products in its stores.
While the move to sell more at full price drove a better-than-expected quarterly profit, it hit Kors’ store traffic, with same-store sales falling in the low single digits in the reported quarter.
Michael Kors’revenue decreased 4.8 per cent to US $ 981 million and sales at Jimmy Choo, Capri’s stiletto brand, fell 8.7 per cent to US $ 158 million in the quarter.
However, Italian luxury fashion brand Versace, which Capri bought last year for about US $ 2 billion, has proved to be the star, helping the company gain a higher than expected revenue of US $ 207 million beating analysts’ average estimate of US $ 202.37 million.
For the full year, Capri expects revenue of US $ 5.8 billion, down from its earlier forecast of US $ 6 billion. Net income attributable to the company fell to US $ 45 million from US $ 186 million, due to a US $ 97 million impairment charge.
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