Once a fashion must-have, Michael Kors' luxury handbag brand is in trouble.
Business Insider reports last month that the brand's total sales fell 11.2 percent to $1.06 billion in the quarter ended April 1. The company said in a statement that it would close between 100 and 125 of its full-priced stores to improve profitability.
Neil Saunders, CEO of GlobalData Retail, a retail-data consulting firm described the sales results as "catastrophic" and indicated that it doesn't bode well for the company.
"Michael Kors' precipitous drop in sales does very little to reassure that the company's nascent recovery program is on track," wrote in a note to clients. "Looking ahead, it is clear that Michael Kors has futher to fall."
Saunders says that a contributing factor to Michael Kors' poor performance is that many customers are no longer shopping the luxury brand and that it hasn't given customers a reason to return.
"In truth, ranges and collections lack oomph and definition, and across many established stores levels of service and merchandising are lackluster," Saunders wrote. "In short, the brand is nowhere near where it needs to be if it wants to excite and inspire customers."
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