The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — Michael Kors owner Capri Holdings Ltd cut its full-year forecasts on Wednesday, citing a $100 million hit to revenue from the coronavirus outbreak in China as it closed 150 stores in one of the most important markets for luxury fashion labels.
A rapidly growing upper-middle class has made China a critical market for luxury goods makers but uncertainty over the epidemic, which has killed more than 490 people, has forced many businesses to shut stores and factories.
"While this global health emergency is expected to be temporary, the duration and intensity of the disruption is uncertain, including potential broader impact outside of China," Capri, which also owns Versace and Jimmy Choo, said in a statement.
The company, which has 225 stores in mainland China, cut its revenue forecast to $5.65 billion from $5.8 billion. It also lowered it full-year profit forecast to $4.45 to $4.50 per share from a prior outlook of $4.95 per share.
ADVERTISEMENT
Capri said most of its stores that are still open are operating with reduced hours and experiencing significant declines in customer traffic.
Capri's total revenue in the third quarter ended December 28 rose 9.2 percent to $1.57 billion beating analysts' average estimate of $1.54 billion, according to IBES data from Refinitiv.
Excluding items, the company earned $1.66 per share, beating the estimate of $1.59 per share.
By Uday Sampath; editors: Arun Koyyur and Saumyadeb Chakrabarty.
The designer has always been an arch perfectionist, a quality that has been central to his success but which clashes with the demands on creative directors today, writes Imran Amed.
This week, Prada and Miu Miu reported strong sales as LVMH slowed and Kering retreated sharply. In fashion’s so-called “quiet luxury” moment, consumers may care less about whether products have logos and more about what those logos stand for.
The luxury goods maker is seeking pricing harmonisation across the globe, and adjusts prices in different markets to ensure that the company is”fair to all [its] clients everywhere,” CEO Leena Nair said.
Hermes saw Chinese buyers snap up its luxury products as the Kelly bag maker showed its resilience amid a broader slowdown in demand for the sector.