Jimmy Choo, Michael Kors Parent Plans to Have Most Stores Open by July
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As the coronavirus pandemic shows signs of abating, Capri Holdings Ltd. today offered some more details on its store reopening plan.
The Versace, Jimmy Choo and Michael Kors parent currently has less than 15% of its 455 retail units in the Americas open following coronavirus-induced closures in mid-March — but by early July, it expects the majority will be reopened. In Europe, the Middle East and Africa, about 60% of stores are back across the three banners after closing in March, with plans for most doors to reopen by July. But so far, sales at reopened outposts in EMEA are down by about 50% volume compared with the same period a year earlier.
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At the same time, Capri has seen growth in its e-commerce business during the coronavirus crisis, with April and May online sales nearly doubling year-on-year for both Versace and Michael Kors. Additionally, Capri is seeing positive signs in Greater China, where all 288 stores have reopened, and in mainland China specifically, where sales volume has “begun to gradually build.” April and May store sales for Versace and Jimmy Choo were about the same as they were last year on the Chinese mainland, the company said, while Michael Kors sales are about 80% of what they were a year ago. (In Japan, South Korea and other parts of Southeast Asia, about 70% of the 210 units have reopened after closures began in February.)
Similar to other retailers that have reopened doors — such as Under Armour, Nordstrom and Macy’s — Capri said it has implemented several practices to help keep both shoppers and staff safe as doors reopen. The company has enhanced its cleaning and sanitization procedures, placed hand sanitizer throughout its stores and added social distancing markers. Capri is providing employees with face coverings and gloves and is encouraging customers to wear masks as well as to use contactless payment options.
“As we reopen our stores around the world, we are prioritizing the health and safety of our employees, customers and communities. We are taking a prudent and measured approach to reopening our stores to ensure all necessary precautions are in place while maintaining the exceptional in-store experience our customers expect from our luxury houses,” said Capri chairman and CEO John Idol.
As with other companies, Capri has has taken a number of steps to preserve cash flow and cut costs in response to the coronavirus crisis.
For the 2021 fiscal year, Idol is not taking a salary, along with Michael Kors’ namesake founder and chief creative officer Michael Kors, Versace chief creative officer Donatella Versace and Jimmy Choo chief creative officer Sandra Choi. The Capri board of directors will see their cash pay reduced by 50%, and the company said it anticipates reducing its corporate workforce in the future. Additionally, on April 6, the umbrella group announced that it would furlough its entire North American store staff of about 7,000.
Further, the company is significantly decreasing capital expenditures for the current fiscal year and is reducing marketing spend as well as delaying or canceling some new store openings. Plus, it drew down the remaining $300 million from its $900 million revolving credit facility about two months ago. It had a total of $900 million in cash and cash equivalents as of April 1.
“As the world emerges from the global shutdown we believe our consumers will once again express themselves through fashion and luxury,” said Idol in a statement. “We remain confident and optimistic about the long-term opportunities for each of our unique luxury houses.”
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