Fossil’s CEO closing stores, cutting staff as sales fall

Fossil Group is looking for its next chapter under new leadership, even as it makes even deeper cuts and grapples with falling sales.

The Texas-based retailer, which sells watches and accessories, is closing about one-fifth of its stores, or about 50, after ending its last fiscal year with roughly 250 sites, according to a statement. It already had chopped about that many on net basis in the previous year. Fossil also has reduced its corporate workforce, a move that was completed in late February.

CEO Franco Fogliato, who stepped into the position last year, is cutting costs and putting a bigger focus on its core, including a renewed emphasis on traditional watches on its brand platform. Streamlining efforts should slice about $100 million in sales, general and administrative expenses in 2025, the company said.

The new efforts follow a sales decline last year of about 19%, a bigger drop than the 16% in the 2023 fiscal year. The decrease last year was partially tied to the exit of the smartwatch category and the store changes.

“During my first six months in the CEO role, we moved swiftly and took a number of pivotal actions to set up the business for long-term success while formulating a comprehensive turnaround plan,” Fogliato said in prepared remarks for the company’s quarterly conference call. “We are committed to the journey ahead.”

Gross margins rose during the fiscal fourth quarter, and adjusted income swung from a loss to a gain, according to the report last week. Investors bid up the stock following the news though it’s given up some of those gains. Overall, the stock is down for the year.

In the announcement, the company also said it is continuing to work with its advisers and progressing on its previously announced strategic review of its business model and capital structure.