Fossil Closing At Least 65 Stores After Q4 Sales Fall 26%
Watch and accessories retailer Fossil Inc. is facing more store closings in 2021 as the Richardson, Texas-based firm reels from a 26% drop in sales during the fourth quarter of 2020.
Coronavirus-related traffic declines pushed the company's sales from $711.6M in the fourth quarter of fiscal 2019 down to $528.1M in the fourth quarter of last year.
Sales worldwide for the entire 2020 fiscal year fell 27% to $1.6B, according to the company's Q4 earnings report.
As sales fell inside Fossil's brick-and-mortar stores, digital channels such as e-commerce, wholesale dot-com partners and third-party e-commerce channels picked up some of the sales slack, but not enough to prevent a scaling down of the company's business and real estate.
The retailer had closed roughly 30 stores by the end of last year and anticipates shuttering another 65 to 75 locations in 2021.
Fossil's projected brick-and-mortar closings are in line with what's expected in the second year of the pandemic across the entire retail space, with Coresight Research projecting 10,000 store closings nationwide in 2021 ― a statistic that would set an annual record, beating the 8,741 closings recorded in 2020.
This massive loss of retail occupancy would result in 138.5M SF of empty U.S. retail space, Coresight reported. U.S. retailers had already announced plans to shutter over 1,600 stores in the first month of the year, with JCPenney, Macy's and Bed Bath & Beyond announcing some of the cuts.
Fossil has a debt load of $227M and roughly $358M in total liquidity as it heads deeper into 2021.
The firm's overall general and administrative expenses fell 20% to $900M last year due to corporate and infrastructure changes, including store closings that resulted in a $14M gain on early lease terminations tied to shuttered retail outlets.