If you are a shopper who likes buying Michael Kors handbags on sale at department stores, you are going to be out of luck soon.
On its fourth-quarter earnings conference call, Michael Kors executives laid out a strategy to cut back on the number of products it sells to wholesalers, or retailers that sell many other brands, to better control pricing and protect brand image.
"We have built a very solid business with department stores, not only domestically but internationally. We think the channel is a very strong channel, across the world, great banners that we operate our brand inside of, and we support them 100 percent in good times and in difficult times," said CEO John Idol.
"That being said, what has happened in North America, in particular, and you are starting to see a little bit of it in Europe, is that as mall traffic has declined, stores have taken an aggressive position on promotional activity to generate volume and traffic into their buildings," he said. "And we have seen that, magnified, over the last 12 months. And we believe that — that long-term — that is not healthy for the Michael Kors brand."