Country: USA

Unable to with stand the struggling retail market and the emergence of online retailers like Amazon, American department store chain, Sears Holdings Corporation, will shutter 8 Sears and 35 Kmart unprofitable stores by early October this year. The closure of under-performing stores will allow the retailers to focus more on the better-performing stores as well as to return on the path of profitability.

“This is part of a strategy both to address losses from unprofitable stores and to reduce the square footage of other stores because many of them are simply too big for our current needs. We have made significant progress in our restructuring programme since the beginning of the year and are well on track to achieve our US $ 1.25 billion annualised cost savings target,” said Eddie Lampert, CEO, Sears Holdings.

Sears, which previously announced to close 265 stores this fiscal, has realised that further measures need to be introduced in order to survive in the challenging retail environment. In the first quarter of the current financial year, Sears’ comparable sales had plunged 12.4 per cent, while Kmart had reported an 11.3 per cent drop.

Additionally, the advent of e-retailers and continuous drop in store traffic have further pushed the company to slash its business operations. This strategic move will bring down the total number of Sears stores to around 1,140 from 2,073 about five years back.

However, the changes made are expected to build more confidence in the future of Sears Holdings among its vendors and put the company on a more level playing field with its competitors in the retail space.

America’s iconic denim label, True Religion Apparel Inc., has become the latest fashion retailer to have filed for bankruptcy protection. The fashion brand expects it’d take 90 to 120 days to obtain confirmation of its pre-arranged plan by the US Bankruptcy Court. Throughout the implementation of this process, the premium denim retailer will continue to operate its business without interruption to customers, employees and business partners.

“After a careful review, we are taking an important step to reduce our debt, reinvigorate True Religion’s iconic brand, and position the company for future growth and success,” said John Ermatinger, President and CEO of True Religion in a statement issued by the company.

With the bankruptcy filing, the upscale denim maker joins other counterparts which have fallen out of ‘fashion’ in the retail market – American Apparel, Papaya Clothing, Rue21 and others as consumers are increasingly shopping online, turning less to the brick-and-mortar specialty shops and department stores.

The Fashion market dominance of online retailers such as Amazon has gravely hurt True Religion which currently operates around 130 stores that make up for 75-80 per cent of its total retail sales. Additionally, the pricey denim label has tie-ups with department store chains like Sakes Fifth Avenue, Nordstrom and Bloomingdale’s which sell its products.

Meanwhile, the jeans retailer recently announced its year-to-date adjusted EBITDA through May at US $7.1 million, which is 95 per cent more than what it attained in 2016. This astounding progress on the retail front will allow True Religion to enter the next phase of recapitalisation process with buoyancy as it continues to drive the business forward.

US-based global luxury lifestyle brand Michael Kors Holdings Limited has announced closure of more than 100 of its full-price retail stores over the next two years.

As on April 1, 2017, the company operated 827 retail stores, including concessions, compared to 668 retail stores, including concessions, at the end of the same prior-year period. It had 133 additional retail stores, including concessions, operated through licensing partners. Including licensed locations, there were 960 Michael Kors stores worldwide at the end of the fourth quarter of fiscal 2017.

Also Read – Michael Kors hires new man to lead finances

Drop in revenue in the fourth quarter of the year is reportedly the reason behind the fashion brand’s latest move. Its total revenue decreased 11.2 per cent to US $ 1.06 billion from US $ 1.20 billion in the fourth quarter of fiscal 2016.

US-based global luxury lifestyle brand Michael Kors Holdings Limited has announced results for the fourth quarter ended April 1, 2017. During the quarter under review, total revenue of the fashion retailer decreased 11.2 per cent to US $ 1.06 billion from US $ 1.20 billion in the fourth quarter of fiscal 2016.

In the reporting quarter, retail net sales increased by 7.4 to per cent US $ 2.57 billion. Comparable sales decreased 8.3 per cent. On a constant currency basis, retail net sales grew 7.8 per cent, and comparable sales decreased 8.1 per cent.

Also Read – Michael Kors’ Q3 revenue tumbles 3.2%

Gross profit also plunged 4.9 per cent to US $ 2.66 billion, and as a percentage of total revenue was 59.2 per cent. Foreign currency translation and transaction unfavourably impacted gross profit margin by approximately 60 basis points. This compares to 59.4 per cent in the same period in fiscal 2016.

The company operated 827 retail stores, including concessions, compared to 668 retail stores, including concessions, at the end of the same prior-year period.

John D. Idol, Chairman & Chief Executive Officer of the company commented, “Fiscal 2017 was a challenging year, as we continued to operate in a difficult retail environment with elevated promotional levels. In addition, our product and store experience did not sufficiently engage and excite consumers. We acknowledge that we need to take further steps to elevate the level of fashion innovation in our accessories assortments and enhance our store experience in order to deepen consumer desire and demand for our products.”

Looking ahead, as the company expands the fashion innovation in its accessories assortments, right-size its store fleet and elevate store experience. Fiscal 2018 will be a transition year in which it will establish a new baseline before returning to long-term growth.

PVH Corporation has noted positive sales growth for its brands such as Calvin Klein and Tommy Hilfiger China during the first quarter.

During the quarter under review, Calvin Klein’s sales globally increased 5 per cent to US $ 756 million while Calvin Klein International revenue increased by 11 per cent to US $ 380 million (increased 13 per cent on a constant currency basis) compared to the prior year period, due principally to continued strength in Europe and China.

Revenue for Tommy Hilfiger in the same quarter increased by 6 per cent to US $ 842 million (increased 9 per cent on a constant currency basis) compared to the prior year period.

Tommy Hilfiger International revenue surged 15 per cent to US $ 524 million (increased 19 per cent on a constant currency basis) compared to the prior year period. This increase was driven by outstanding performance across all channels and markets in Europe, as well as the inclusion of a full quarter of revenue from the China business as a result of the April 2016 acquisition of the 55 per cent interest in the company’s former Tommy Hilfiger joint venture in China (“TH China”) that it did not already own (the “TH China acquisition”).

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Revenue in the Heritage Brands business for the quarter decreased 3 per cent to US $ 391 million compared to the prior year period, principally resulting from a planned shift in the timing of shipments from the first quarter into the second quarter as compared to the prior year period. Comparable store sales were flat.

Commenting on the results, Emanuel Chirico, Chairman and Chief Executive Officer said, “We continue to experience strong momentum in our Calvin Klein and Tommy Hilfiger businesses, which allowed us to exceed both our sales and earnings guidance for the first quarter despite the volatile macroeconomic environment and the highly promotional retail market in the US.”