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Michael Kors Holdings Ltd. (NYSE: KORS) said Wednesday it will close up to 125 stores, or about 13% of its total, the latest merchant to retrench in an increasingly challenging retail environment. The New York-based luxury fashion brand said in its fiscal fourth-quarter financial results before the markets opened that it plans to shutter stores over the next two years and expects to incur costs of up to $125 million.

The company said that it had $0.73 in earnings per share (EPS) and $1.06 billion in revenue. Consensus estimates from Thomson Reuters had called for $0.70 in EPS and $1.05 billion in revenue. The same period of last year reportedly had EPS of $0.98 and $1.20 billion in revenue.

Total quarterly revenue decreased 11.2% year over year, or down 10.6% in a constant currency basis.

Sales for stores open at least a year decreased 14.1%. On a constant currency basis, retail net sales grew 1.1% and comparable sales decreased 13.6%. Wholesale net sales decreased 22.8% to $456.1 million and on a constant currency basis, wholesale net sales decreased 22.3%. Licensing revenue decreased 6.2% to $33.4 million.

The company said it recorded impairment charges of $193.8 million in the quarter, primarily related to underperforming lifestyle stores. The company said there were 960 Michael Kors stores worldwide at the end of the fourth quarter of fiscal 2017. The store-closing announcement basically pulls back on the rapid store expansion Michael Kors embarked on to challenge competitors such as Coach in suburban malls.

In terms of the outlook for the fiscal first quarter, the company expects EPS in the range of $0.60 to $0.64 and revenues between $910 million and $930 million. The consensus estimates are $0.81 in EPS and $941.28 million in revenue for the quarter.

John D. Idol, board chair and chief executive, commented:

Fiscal 2017 was a challenging year, as we continued to operate in a difficult retail environment with elevated promotional levels. In addition, our product and store experience did not sufficiently engage and excite consumers. We acknowledge that we need to take further steps to elevate the level of fashion innovation in our accessories assortments and enhance our store experience in order to deepen consumer desire and demand for our products. Looking ahead, as we expand the fashion innovation in our accessories assortments, right-size our store fleet and elevate our store experience, fiscal 2018 will be a transition year in which we establish a new baseline before returning to long-term growth. We have a strong brand, led by Michael Kors, with a history of fashion innovation and leadership, a global footprint with stores positioned in the best locations around the world and the marketing expertise to effectively convey our fashion stories.

Shares of Michael Kors fell more than 10% to $32.47 Wednesday morning in New York trading. The stock had plunged 8% after the opening bell to $33.37, with a consensus analyst price target of $40.41 and a 52-week range of $34.92 to $53.29.