Michael Kors Stock Has The Second-worst Trading Day Ever

Michael Kors Holdings Ltd. shares tumbled 8.4% on Tuesday in their second-worst decline ever, after a Credit Suisse downgrade raised concerns the designer label may be losing some of its cool. Analyst Christian Buss, who cut Kors rating to neutral from outperform, said he's increasingly concerned about the level of promotions seen in the upscale department store space, adding the percentage of Kors units on sale in that channel spiked to 31% in December from 5% in October. He said Kors put 18% of its handbag units on sale between October and December, the highest level compared to other top brands' average of 12%. He said Kors also discounted 65% of handbags on the company-owned website in December, making it the most promotional website among six brands Buss studied. While the company has kept a consistent level of discounting at mid-tier department stores, the analyst said he's concerned that discounting may spill into the mid-priced space in the new year. His study of over 3,000 handbag units also showed an increasing intensity of promotions industrywide during the holidays. Kors rival Coach Inc. had the highest average discount rate in the mid-tier space while Kate Spade saw heavy markdowns online, he said. Kate Spade fell 4.4%. Coach dropped 1.2%. Read related story on Coach buying luxury label Stuart Weitzman