Fossil has been a dominant name in fashion accessories for decades, but is now facing a steep sales decline. The company said, “The sales decrease was largely driven by overall category, consumer, and channel softness.” Fossil has already closed 50 of its locations in 2024. As of Q1 2025, the brand has already cut 28 more stores and plans to cut roughly another 26 in the coming months.
This downscaling should help the company find more stability financially and reposition itself for long-term success. With broader industry changes, the chain is finding it hard to stay relevant, with the rise of smartwatches and fast fashion. Cutting costs by closing stores could be exactly what the franchise needs in order to see better profit margins.
Watch Sales
One of Fossil’s most iconic products is its watches, but in recent years, these sales have steadily declined, most likely due to technological innovations such as smartwatches and consumer trends moving towards more practical accessories.
Even before Fossil left the smartwatch market, its branded sales dropped by around 20% last year.
The Smartwatch Challenge
Fossil’s market was significantly disrupted by smartwatches, and their own smartwatches failed to draw in consumers from the market. The company left the smartwatch market in 2024, which showed how difficult it was for it to compete with competitors who have a background in technology instead of fashion.
The smartwatch market itself shrank as well, showing that tech trends can’t always be stable.
Store Closures
Already closing 50 stores is roughly about 20% of their retail footprint. This reprioritization is a difficult but necessary step. $100 million is projected to be saved in expenses and reduced promotional pressure.
With underperforming stores closing, Fossil can reinvest in its strongest locations, improving profit margins and overall customer satisfaction with fewer stores to manage.
Restructuring
Along with Fossil closing many of its stores, it is also laying off some of the workforce and handing over the responsibility of their business to other companies in other countries. This will ultimately make it cheaper to run the business and less complex.
Fossil can then put its focus on priorities that will help the company grow to be relevant again, if everything goes according to plan. Fossil CEO Franco Fogliato said, “Transitioning smaller international geographies to a distributor model allows Fossil to build a more competitive and profitable model in key markets.”
Working With Other Retailers
Instead of relying on its own stores, Fossil is looking at wholesale partnerships, which will lower operating costs and reduce the reliance on heavy discounting to move products.
Fogliato said, “We are implementing a dual approach: prioritizing the wholesale channel and transforming our direct-to-consumer business model,” which should improve profit margins and overall sales efficiency.
New Ideas
The company wants to stay relevant and attract younger consumers by launching creative collaborations that will be incorporated into limited-edition watches.
These partnerships could include popular brands and games, helping them find a place with a new audience when their current market is already crowded. Fossil knows that it needs to stand out as it is necessary for its survival.
New Leaders
Appointed late last year, Franco Fogliato is Fossils’ new CEO. Along with a new CFO, Fossil now has leaders who have experience in bringing back companies that are struggling in the market.
They plan on “refocusing on the core business, right-sizing the cost structure, and strengthening the balance sheet.” This provides a clear direction for recovery and growth in a difficult market.
Making Relevant Products
By refreshing its brand and website, Fossil is directing its efforts toward innovation and quality, which its core customers still value.
These tactics could help to build a stronger bond between the customer and the product, helping Fossil compete with other fashion and tech giants in an already overcrowded market.
Other Brands Are Also Struggling
Fossil isn’t the only fashion brand that’s facing challenges in a rapidly changing market. Many other traditional and long-standing fashion brands are struggling as consumers shift to shopping online and demand more sustainable products from retailers.
Fossil making changes shows an industry-wide trend, where many brands may have to adapt quickly or start to slowly fade away.
A Revenue Drop
Fossil has continued to face a revenue drop, with the company losing 19% of its profits in 2024. This highlights that the market for its products can be volatile.
The company has made strides towards reducing costs, but still has a long way to go in order to further reduce expenses and improve profit margins. Fossil needs to strengthen its financial standing in the market to avoid more losses and stay a competitive brand.
Sustainability In Fashion
Fossil is modernizing its remaining locations and focusing on its strengths—traditional watches. These focused efforts should improve efficiency. In a modern age where people demand more sustainable products, Fossil is responding by better aligning its production with environmental regulations, especially in regions like Europe.
This will ensure that more sustainable and durable products result. Fossil will be able to build better trust with consumers who are eco-conscious and help to future-proof the company.
What’s Next?
While the closing of stores may reduce the brand temporarily in the public eye, it is predicted that the brand will come out of this as a more profitable and competitive entity.
With resources freed up, they can be invested in new product development, as well as digital channels. This could help Fossil reconnect with consumers and rebuild its foothold in the market that they have held for decades.
Impact On Consumers
Fossil’s reduction in locations and shift away from direct retail will impact consumers. Those who are loyal to the brand will find fewer physical locations, especially in competitive malls. However, if Fossil enhances its online reach, then customers will find it easier to find its products from the comfort of their couch.
There may be fewer discounts on Fossil products as they shift towards wholesaling techniques, and collaborations should be seen more, targeting younger consumers. All these changes are the effects of a company making the best effort to continue to thrive in a flooded and competitive market.
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