Michael Kors’s (NASDAQ: KORS) founding investor and largest shareholder of Sportswear Holdings, has announced his decision to sell a 5.7% stake in the company. The 11.6 million shares stake is valued at $890 million.

The company’s stock price has dropped 4.5% to $76.58 per share since the sale was made public. Furthermore, the proceeds of this secondary public offering will not go to Kors but to JP Morgan Chase (NYSE: JPM) instead – the investment firm overseeing this stock-sale transaction. Silas Chou and Lucas Stroll, Sportswear’s representatives on Kors’s board, have agreed to resign as board members following the sale. The company will not be replacing the members and will only have its remaining seven members, five of whom will be independent.

With one of the initial investors cashing out its shares, analysts question whether the company could be moving into a phase of slower earnings growth. Based on projections, Kors should see positive performances in the future as earnings per share rose by 9.2% in the most recent quarter as compared to the same quarter a year ago, but with this sudden move by Sportswear Holdings, things are uncertain for them.

When Michael Kors was first established in 1981, it strived to make its mark on the fashion industry with its luxury goods, namely handbags, accessories apparel and fragrances for both men and women. Now, it has stores in all the major fashion capitals around the world including London, Milan, Paris, Tokyo and New York. And in 2011, following its initial public offering of $20 a share, Kors had seen an increase of nearly fourfold in its stock price. Things were looking good for the company.

However in recent months, Kors’s shrinking profit margins have been shaking investors’ confidence. Also, CEO John Idol’s recent attempt to introduce fall products earlier in the year was not well received, putting further strain on the company’s share price. However, he still has positive expectations for what is to come.

“We believe we have a bright future ahead with continued opportunity for growth,” Idol stated during a recent interview.

This positive growth projection stemmed from the independence that Kors gained after the resignation of board members Chou and Stroll as the once present conflict of interest with its China Holdings is now gone. The company will be able to acquire licensing of the Kors-branded stores in China and expand its franchise. Even so, it will take the company at least four years to acquire the China licensing and until then, Barclay’s Joan Payson maintains an Under Weight rating on Kors and a target of $74.