MK After Adjusting Strategy, Sales Rose 10.1% Over The Same Period.

Winning British luxury in 1 billion 200 million dollars

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After that, the United States was very extravagant.

Michael Kors recently handed over its first pcript in fiscal year 2018, which shows that its internal restructuring measures are beginning to take effect.

According to the world clothing and shoe net, in the first quarter of July 1st, Michael Kors (NYSE: KORS) sales fell 3.6% to 952 million US dollars compared with the same period last year, while net profit decreased 14.7% to 125 million US dollars compared with the same period last year, while same store sales reached 5.9% in the summer, but both were better than analysts' expectations.

After a series of measures, Michael Kors retail sales rose 10.1% to $619 million compared to the same period last year, while wholesale sales fell 23% to 303 million dollars, and the licensing revenue dropped 5.6% to 28 million 900 thousand US dollars.

By Region:

Retail sales of Michael Kors in the US market are basically flat compared with the same period last year, at 392 million US dollars, accounting for 41.2% of total sales, while wholesale channel sales fell by 19.5% to 227 million US dollars.

Retail sales in Europe recorded a growth of 2.5% to $122 million, accounting for 12.8% of total sales, and wholesale channel sales fell 28.4% to $65 million.

Thanks to the expansion plan of Michael Kors in Asia, retail sales in the region rose 104.8% to $105 million compared to the same period last year, while wholesale channel sales plummeted to 47% to 10 million 400 thousand dollars.

As of the end of the reporting period, Michael Kors has 979 sales outlets worldwide, including 771 retail outlets.

Group Chairman and chief executive officer John D.Idol said retail sales growth in the first quarter of fiscal year 2018 was mainly driven by sales performance in North America and Europe.

After releasing its fourth quarter results in fiscal year 2017, Michael Kors admits that the group is suffering from a downturn in the department store, where handbags are being squeezed worldwide.

In order to improve the situation, Michael Kors issued a new strategic plan called "Runway 2020".

The plan includes closing stores, strengthening brand innovation and further reducing wholesale sales.

John D. Idol believes that 2018 will be a year of pition.

Neil Saunders, general manager of Global data retail agency, said in its latest research report that the decline of first quarter sales of Michael Kors is within expectation, which is a necessary process for Michael Kors to get rid of excessive promotion of department stores.

A series of restructuring measures, including closing stores and reducing sales promotion, will continue.

John D. Idol said the company will close 100 to 125 stores in the next two years, including optical shops that are unable to make profits because of declining revenues and declining traffic in some shopping malls.

At the same time, Michael Kors also plans to further reduce its wholesale business, reducing the number of promotional days in North America by 40%.

Adrienne Yih, a Wolfe research company, said that the pace of Michael Kors expansion was too fast in the past and the penetration of wholesale channels was too fast. Therefore, it is correct for the brand to close 100 to 125 stores in the next two years.

And women's clothing will become the focus of future development, especially in the fastest growing dress category last year.

With the growth of footwear and men's clothing business, Michael Kors will continue to return to the positioning of lifestyle brands, after which the company has focused on handbags and accessories for a long time.

Gabriella Santaniello, the founder of fashion retail research firm A-Line Partners and former managing director of Wedbush Securities Retail Market Research Department, believes that the key problem of Michael Kors is lack of innovation.

Since the company went public in December 2011, the brand already has Selma style, and is the only brand that has many color matching Multi Size packages.

Another analyst pointed out that if Michael Kors readjust its pricing strategy, it will not have a big negative impact on sales.

The problem is mainly concentrated in the same store sales, if the same store sales have changed, it will cause huge room for growth.

The report shows that if Michael Kors tries to reduce the excessive discount of department stores, the pricing pressure will start to ease, and stocks will be close to the valuation of the same industry, so Michael Kors has 38% potential room for growth.

It is noteworthy that, while constantly adjusting to the interior, Michael Kors is also constantly distributing outside, in addition to continuing to brand globalization, and through continuous acquisitions to achieve greater ambition of the group.

After failing to compete with Coach Inc. (NYSE:COH) for Kate Spade&Co. (NYSE:KATE), Michael Kors successfully acquired Jimmy Choo for $1 billion 200 million last month.

John D.Idol said that after completing the acquisition of Jimmy Choo, Michael Kors will maintain its two brand independent operation. Pierre Denis will continue to serve as the chief executive officer of Jimmy Choo, while Sandra Sandra will continue to be the creative director.

John D.Idol also revealed that the ultimate goal of Michael Kors is to create a global fashion luxury group, because a diversified brand portfolio is conducive to long-term development of the group.

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Jimmy Choo was co founded by Zhou Yangjie and Tamara Mello, who was a fashion accessory editor at the time in the British edition of Vogue. However, the two founders left the brand in 2001 and 2011, and sold the brand 68% share to JAB in 2011, and then went public in London in 2014.

At present, Jimmy Choo has more than 150 stores all over the world.

According to LADYMAX data, the sales of Michael Kors shoes are only 11% of the total sales. Analysts say that it can bring Jimmy Choo to the company, which will help improve the proportion of Michael Kors shoe products in the overall sales.

At this point, the confrontation between the three brands of Kate Spade, Michael Kors and Coach in the light luxury camp has undergone structural changes. It has become the two competition between Coach group and Michael Kors group, but Michael Kors is still in a weak position.

Instinet analyst Simon Siegel believes that Michael Kors still has a long way to go through its acquisition to break through the current downturn.

There are various indications that although Michael Kors itself has some problems, if the strategy is properly adjusted, the future prospect is still optimistic, and the acquisition of Jimmy Choo is also within its capabilities.

The European luxury group LVMH and Kai Yun group have recently implemented a streamlined strategy in the luxury retail environment, without purchasing.

In this way, Michael Kors is the most suitable buyer for Jimmy Choo.

For the second quarter of fiscal year 2018, Michael Kors predicted that the number of units in the sales fell by about 1 billion 35 million to 1 billion 50 million dollars, and the annual revenue was estimated at $4 billion 275 million, with a profit margin of about 16%.

However, due to the fact that Michael Kors's acquisition of Jimmy Choo has not yet been completed, the Jimmy Choo brand sales are not considered.

But the Group expects Jimmy Choo to generate 570 million to 580 million dollars in revenue in fiscal year 2019.

According to LADYMAX data, Jimmy Choo 2016 sales rose 2% to 364 million pounds, or about 471 million US dollars, compared with the same period last year.

Driven by the Asian market, men's shoes have become the fastest growing category of Jimmy Choo, and shoes account for 75% of total sales.

In addition, the licensing agreement between Jimmy Choo and Safilo was extended to 2023, and men's sunglasses were planned to be launched in 2018.

In view of the double digit growth of retail channel sales, investors' confidence in Michael Kors has greatly increased.

After the release of the earnings report, Michael Kors rose 21.54% to $45.25 per share, with a market value of about $7 billion 51 million.

More interesting reports, please pay attention to the world clothing shoes and hats net.