The UK subsidiary of US brand Michael Kors, Michael Kors (UK) Limited, has announced plans to shutter five stores in the next fiscal year as macroeconomic conditions continue to impact consumer spending. The news was revealed in the firm’s latest annual report for the year ended 30 March 2024, filed with the UK’s Companies House.

While four stores will be closing permanently–including those in Newcastle, Milton Keyes, Manchester’s New Cathedral Street, and the concession in Harvey Nichols London–Michael Kor’s Regent Street store in London will be shuttering temporarily while “waiting for the relocation to a new near-by premises”.

In light of the plans, the company said that sales for FY25 are expected to decrease by 20 percent for both retail and e-commerce compared to 2024. Prices are also expected to drop in the “foreseeable future”, the report noted however, “in order to better meet consumer demand and counter competitors’ strategies on the market”.

In terms of financials, Michael Kors (UK) Limited revealed a decline in turnover from 77.17 million pounds in 2023 to 70.85 million pounds over the reporting period. Gross profit also fell from 28.58 million pounds to 23.06 million pounds, while operating profit lowered to 4.96 million pounds, a decrease on the 31.67 million pounds reported in 2023.

Michael Kors cited “general macroeconomic conditions” as the cause for the turnover decline, particularly in regards to a reduction in customer demand. The company’s gross profit margin also fell in percentage compared to the previous year due to an “increase on markdowns aimed to push gross sales”.

This came despite an increase in profit for the financial year, which rose from 39.72 million pounds to 66 million pounds. This uptick reflected what the company said was the “sustainability” of the brand, where “despite the level of competition and the current challenges in the economic environment affecting the UK retail sector”, the UK subsidiary “continues to be a profitable business”.