Ralph Lauren and Michael Kors report weak sales

Ralph Lauren polo shirts Image copyright Reuters

Luxury brands Ralph Lauren and Michael Kors have both reported weak sales against a backdrop of fewer customers visiting department stores and the strong dollar hitting tourists.

Ralph Lauren said first quarter net revenues fell 4% to $1.6bn, pushing the company into a loss of $22m.

Quarterly revenues at Michael Kors inched up 0.2% to $987.9m, but sales at stores open more than a year fell 7.4%.

Profits for the quarter dropped 15.7% to $146.3m.

Hakon Helgesen, retail analyst at Conlumino, said luxury brands were not being helped by what he called "the car-crash that is the American department store channel".

He believes Ralph Lauren has become "muddled and confused" and should be focusing on more upmarket stores such as Nordstrom and Neiman Marcus.

Image copyright Reuters

'Muted' market

Ralph Lauren chief executive Stefan Larsson said the company was making good progress with its restructuring plan.

Earlier this year, he announced proposals to streamline the business by closing stores and cutting 8% of its workforce with the aim of producing annual savings of between $180m-$220m.

Although revenues were lower at Ralph Lauren, they were not as bad as feared and shares in the company jumped 10% in morning trade.

Michael Kors chief executive John Idol said progress during the quarter had been "muted" because of a decline in customers going to shopping malls and a fall in tourism in some American cities.

Department stores have been discounting to help attract customers who are now turning to the internet to make their purchases.

However, the company said higher sales in Europe and Asia helped to offset weak trading in the US.

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