The move forms part of its “ongoing global store network optimization initiative”, as well as its reported goal of repositioning from larger format, tourist-dependent flagship locations to smaller stores that “cater to local customers”.
In light of this, the fashion retailer has announced plans to close its London flagship store, in addition to its sites in Dusseldorf, Munich, Paris, Brussels, Madrid and Fukuoka. The group confirmed that all sites are set to close by the end of January 2021.
According to the group, three of the leases will be transferred to a new tenant while the fourth will be subleased to a new tenant. The company confirmed it no longer has lease obligations beyond this financial year, and is scheduled to receive payments to fully offset its lease obligations on the sublease.
It comes as the group said that total sales fell by 5% from $863m (£647m) to $820 (£615) in the third quarter ended 31 October 2020.
CEO Fran Horowitz said: “We are also pleased to announce the early exit of four additional flagship locations by the end of January 2021. This is in addition to the three previously announced fiscal 2020 natural lease expirations. With these seven closures, we should end the year with eight operating flagships down from fifteen at the beginning of the year.
“These actions align with our multi-year strategy of reducing dependence on tourist-driven locations to reposition within key markets and deliver a better omnichannel experience to our local customer.”
He added: “We are encouraged by quarter-to-date results, including ongoing strong digital demand, with our customers responding favorably to new product and messaging. However, this is tempered by uncertainty regarding the potential for increased COVID-related store restrictions and our expectation for elevated shipping, handling and freight costs.
“As we approach the peak holiday selling period, inventories remain well-controlled and we have thoughtful plans in place to help us adapt to changing business conditions. As we have done since the start of the pandemic, we will utilize our proven playbooks to remain agile and provide the best omnichannel experience for our customers.”