Michael Kors Holdings Ltd (NYSE:KORS) is one stock that divide the Street in extremes. While one group of investors just loves the stock, the other group doesn’t see any reason for buying it. No doubt retail overall is going through hard times, especially in the U.S., but luxury retailers are finding it more difficult than others to sustain their growth. On Thursday evening it was revealed that two of the founding investors of Michael Kors Holdings Ltd (NYSE:KORS) will be selling their 5.7% stake in the company in a secondary public offering , following which the company’s stock opened lower today. Jim Cramer explained today on CNBC why he is keeping a close watch on Michael Kors Holdings Ltd (NYSE:KORS)’s stock.
“[…] It peaked in the 90’s, but it really got hammered, I mean, take a look it’s just been awful . My friend Herb Greenberg who writes Reality Check, is saying this is very important, these are two founders, they are resigning from the board […] they are very big shareholders and you don’t want to see them leave because they were instrumental, “ Cramer said.
Cramer highlighted that it’s not just that the two founding investors are leaving from the board, but they are also selling their intire stake in the company. He cautions investors to be very careful with Michael Kors Holdings Ltd (NYSE:KORS)’s stocks owing to this latest development.
According to Cramer it’s not just Michael Kors Holdings Ltd (NYSE:KORS), but he is cautious about the whole fashion retail space overall after the numerous disappointments from companies that operate in this industry sector. According to him, the main concern of investors in the fashion retail space is that the momentum is slowing down and the environment has become more promotional.
As of June 30, 2014, Stephen Mandel‘s Lone Pine Capital owns over 11.5 million shares of Michael Kors Holdings Ltd (NYSE:KORS).