Versace Bling Can't Mask Michael Kors Malaise

Luxury-goods seller Capri Holdings Ltd.’s CEO, John Idol, described the fiscal year the company just completed as a “transformational” one. And, in some ways, it was: Capri bought flashy fashion label Versace and integrated Jimmy Choo into its business after snapping it up in late 2017. But there’s one much-needed transformation that has yet to clearly take hold: The revitalization of its most important brand, Michael Kors.

Capri reported Wednesday that comparable sales for the Michael Kors brand decreased 1 percent in the fourth quarter from a year earlier. Executives said the decline reflected a number of factors, including a drag from its watch business and from efforts to transition its jewelry to a higher price point. A turning point is, apparently, not imminent: The company’s first-quarter outlook is for comparable sales declines in the “low single digits” for the Kors brand. For the full year, comparable sales and operating margins are expected to be just flat – so not backsliding, but not exactly a forecast that suggests a turnaround has taken hold.