ANOTHER US RETAILER CLOSING STORES AFTER 70% PROFIT LOSS

More bad news for the economy as Fossil announces an undetermined number of stores will be closing according to this Business Journal report.

Facing a nearly 70 percent year-over-year profit loss, Fossil Group announced Thursday it will shutter stores and restructure its business.

In its third quarter earnings report, the Richardson accessories company logged diluted earnings per share of 36 cents, including a 22-cent loss, primarily from “accelerated store closings.”

It gained 16 cents from real estate transactions, including 10 cents related to selling and leasing back a Dallas distribution center.

Fossil (Nasdaq: FOSL) did not elaborate on how many stores it plans to shutter, but said the closings are a reflection of how customers are purchasing its products. The retailer currently has more than 600 stores in 150 countries.

“We’ll review and adjust our overall structure with an eye towards streamlining the way we work to respond to the changing needs and demands of our customers, and we’ll examine and adjust our store fleet to reflect the evolving shopping habits of today’s consumer,” CEO Kosta Kartsotis said in the company’s earnings call.

Closing stores is part of a multi-year profit improvement initiative, dubbed New World Fossil, that the company began in the third quarter. The restructuring will focus on the way the company develops products and brings them to market in an effort to build shareholder value.

The effort will also include selling fewer products.

“Consumers don’t want to see a full assortment of products like they would in the old world in a huge department store shop,” Kartsotis said. “They really want to see fewer ideas told well.”

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