Fossil to close up to 15 more stores in 2026 as turnaround continues

Fossil Group plans to close up to 15 stores this year as the watch and accessories company continues shrinking its global retail footprint as part of a broader turnaround strategy focused on reducing costs, improving profitability and strengthening its balance sheet.

Dig deeper:

During the Richardson, Texas-based company's first-quarter earnings call, executives said Fossil closed seven stores during the quarter and expects to shutter as many as 15 locations by the end of fiscal 2026. 

Chief Financial Officer Randy Greben told investors the company would finish the year with about 185 stores worldwide.

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By the numbers:

The planned closures come as Fossil continues efforts to stabilize its business after years of declining sales. The company reported first-quarter net sales of $224.8 million, down from $233.3 million a year earlier. However, its net loss attributable to Fossil narrowed to approximately $810,000 from $17.6 million in the same quarter last year, while operating income improved to $12 million after posting a $6.7 million operating loss a year earlier.

According to Fossil's latest quarterly filing, the company operated 193 stores worldwide as of April 4, down from 220 a year earlier. Over that period, it closed 28 stores and opened one, leaving it with 92 locations in the Americas, 47 in Europe and 54 in Asia.

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Big picture view:

The company has already made significant reductions to its brick-and-mortar presence. In its annual report, Fossil said it closed 49 underperforming retail stores during fiscal 2025 as part of a turnaround plan designed to refocus on its core business, streamline costs and strengthen its financial position.

The turnaround strategy also included reducing its corporate workforce and shifting certain smaller international markets to a distributor model. Fossil said those initiatives generated about $100 million in selling, general and administrative cost savings in fiscal 2025 compared with the previous fiscal year.

What's next:

Despite the continued closures, the company said it is not walking away from physical retail. CEO Franco Fogliato told investors Fossil had "significantly scaled back" its downsizing plans because of stronger performance at its full-price stores. The company has also said its 2026 strategy calls for slowing the pace of store closures while emphasizing profitable growth, improvements to its operating model and increased shareholder value.

Fossil has also cautioned investors about the challenges facing traditional retail. In its annual filing, the company said customer traffic at its stores depends heavily on the health of the malls and shopping centers where they operate. Fossil warned that declining mall traffic, anchor-store closures or widespread mall shutdowns could negatively affect its business.

Fossil products are sold in roughly 132 countries through company-owned subsidiaries and independent distributors. As of Jan. 3, the company operated 88 retail stores and 111 outlet stores, primarily under the Fossil brand.

FOX Business reached out to Fossil Group for comment.

Consumer