After Michael Kors' Sales Tank, How Much Money Does The Company Make?

Designer brand Michael Kors is topping headlines Wednesday after the company announced its decision to close up 125 stores over the next two years. Alongside the retailer’s desire to work alongside the nationwide trend of online shopping, the company also hopes to expand its recognition within Asia.

As of Wednesday, Michael Kors did not confirm which stores would be gone for good and the timeframe for this transition, according to the Los Angeles Times. Yet, the retailer is set to open and focus on stores within beneficial areas.

The company was a market capitalization that ranges from $5.6 billion to $6 billion. Their stock, (KORS), was valued at $36.27. By May, the company earned $4.63 billion.

John Idol, CEO of Michael Kors, discussed the future of the company within a fourth quarterly earning conference call early Wednesday morning.

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“While the fourth quarter performance was largely in line with our expectations, fiscal 2017 was a difficult and disappointing year for us. The retail environment remains challenging,” said ldol on the company’s performance. “We must acknowledge that our company needs to take steps to accelerate the level of luxury fashion innovation and our accessories assortments, and further enhance our store experience in order to better engage and excite consumers.”

According to Fortune, the company had “itself to blame for most of its woes” because they made the bold decision to open several stores too quickly to meet the demands of the previous handbag wave that hit earlier this decade. The goal of this was to ensure that Michael Kors would become the top luxury brand.

Michael Kors is now among the ranks of several luxury brands looking to reevaluate their business. Jimmy Choo announced that they were looking to sell the company, Kate Spade was bought by Coach, and Ralph Lauren also battled store closure problems. Other big name retailers looking to cutback include Guess Inc., Abercrombie & Fitch, and BCBG Max Azria.

READ: Michael Kors (KORS), Ralph Lauren (RL) Q1 Earnings Likely To Suffer

While the company’s new super-plan is expected to save them up to $60M, will it actually work out in their favor? That’s up for debate.

Neil Saunders, CEO of GlobalData Retail, deemed the company’s quarterly sales results as “catastrophic”, according to Business Insider.

“Michael Kors' precipitous drop in sales does very little to reassure that the company's nascent recovery program is on track,” Saunders said. “Looking ahead, it is clear that Michael Kors has further to fall.”

Naturally, Twitter had much to say on the status of the London-based retailer loss.

“Praying for all the lost souls that still wear Michael Kors,” one person said in a Tweet.

From designer Michael Kors’ womenswear company to his judging stint on “Project Runway”, the iconic businessman’s net worth had touched the surface of billionaire status in 2014, according to Forbes. Yet, his worth has dropped since then to $915 million. The brand's revenue slipped 11.2 percent to $1.06 billion from their first quarter earnings, which the Business Insider notes as a “bigger loss” than the initial projection.

The once popular brand could potentially turn this downfall around, but only time will tell what’s in store for Michael Kors’ future.

“We believe in our retail fleet. We think it's critical to our business,” Idol said during Wednesday’s conference call. “We think that the key to success there again revolves around product, and revolves around the store environment and creating excitement.”