Executive Summary

At the 2017 Michael Kors Investor Day event, management outlined Runway 2020, the company’s strategic plan for driving future growth through product innovation, fleet modernization and expansion of its global digital innovation efforts. Highlights from the day’s presentations include:

• Michael Kors is modernizing and rightsizing its fleet and renovating 100 stores globally. Over the next 24 months, the company will close 100–125 stores, which will allow it to increase profitability and see annualized savings of $60 million.
• Michael Kors is diversifying and expanding its product mix beyond its largest category, handbags, into men’s, footwear and women’s ready to wear. The company has committed to delivering 40% less product with 65%–70% more newness. The company is also reducing promotional days by 40%.
• The company believes that China represents a $1 billion opportunity. It plans to expand its footprint in Asia from 228 stores currently to 335 stores in 2020, with more than half of the new stores located in China.
• The company projects that it will return to growth by 2020. Fiscal year 2018 is expected to be a reset year to shrink revenue to a healthy base. The company expects low-single-digit revenue growth and low- to mid-single-digit EPS growth in fiscal year 2019. For fiscal year 2020, Michael Kors projects that all areas will begin to work together, and that the company will see positive revenue growth, positive comp sales, improving margins and mid- to high-single-digit EPS growth.