Coach's Gross Margin approaches 80% and get ready for higher prices in 2011!

glazebrookgirl

glazebrookgirl

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O.G.
Jul 16, 2010
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#1
#3
Keep in mind that gross margin is calculated based on the product only...it doesn't take into account selling expenses, infrastructure, employee salaries, etc.

At the end of the day PBT (profit before taxes) is a more important metric. That's the bottom line after everything and everyone is paid. :smile:
 
#4
Wow! More than LV and other high-end brands? Gross margin is actually the profit before expenses such as running the stores, so you really want to know the net margin (true profit). But I'm sure it's still way up there.
 
#5
Luv2Shop1 said:
Keep in mind that gross margin is calculated based on the product only...it doesn't take into account selling expenses, infrastructure, employee salaries, etc.

At the end of the day PBT (profit before taxes) is a more important metric. That's the bottom line after everything and everyone is paid. :smile:
Click to expand...

Cross post and you said it much better than me! :biggrin:
 
#7
Prices have steadily been on the rise for the past 5-6 months, Just take a look at some of the spring collection. I have noticed at the outlet the mff totes last year/earlier this year were about $150 upon release, they generally start at $179 now.
 
#9
WOW! Thanks for the posting. It's a bit disappointing to see Coach increasing the price even with their high profits (that's my wallet talking). But I can see why they're doing it (that's my business brain talking) lol

I'm really going to be looking forward to those PCE's next year!
 
#10
Prices probably will creep up as the economy heals....Just keep in mind that the stock info website is pushing to sell COH stock so some of the info there, even on pricing, needs to be interpreted cautiously. In a bad economy, luxury handbags is one of the first to go in the retail apparel market....I know a tpfer will recoil at the thought of that, but that gets documented every once in a while in wall street news. Market research supports that mom is the primary buyer of her own handbags, and moms will give up purchases for self vs. family when the economy tightens.
 
#11
Luv2Shop1 said:
Keep in mind that gross margin is calculated based on the product only...it doesn't take into account selling expenses, infrastructure, employee salaries, etc.

At the end of the day PBT (profit before taxes) is a more important metric. That's the bottom line after everything and everyone is paid. :smile:
Click to expand...

can someone find out what the PBT would be then? :biggrin:

good point

proffashionista said:
Prices probably will creep up as the economy heals....Just keep in mind that the stock info website is pushing to sell COH stock so some of the info there, even on pricing, needs to be interpreted cautiously. In a bad economy, luxury handbags is one of the first to go in the retail apparel market....I know a tpfer will recoil at the thought of that, but that gets documented every once in a while in wall street news. Market research supports that mom is the primary buyer of her own handbags, and moms will give up purchases for self vs. family when the economy tightens.
Click to expand...

this is of course, true. but true luxury handbags will not go away.. and i do not consider coach true luxury brand because it is more accessible to those who are middle income family, when the economy tanks people are more selective with what they buy. so will people pick up an overly embellished spring resort chanel bag or a classic quilted jumbo? the latter probably, but they still buy, its just those who are on the lower bracket (myself being one of them) would be more cautious and probably will invest more in family as i bolded or, in savings.

but true luxury doesn't really die, especially when it is done of high quality like hermes.
 
#12
proffashionista said:
Prices probably will creep up as the economy heals....Just keep in mind that the stock info website is pushing to sell COH stock so some of the info there, even on pricing, needs to be interpreted cautiously. In a bad economy, luxury handbags is one of the first to go in the retail apparel market....I know a tpfer will recoil at the thought of that, but that gets documented every once in a while in wall street news. Market research supports that mom is the primary buyer of her own handbags, and moms will give up purchases for self vs. family when the economy tightens.
Click to expand...

I just read an article that said that the luxury brands like Louis Vuitton, Gucci, and Burberry are having record sales this year. Louis Vuitton especially expected a downturn and cut production accordingly. Now they are facing a world wide shortage. When I went to their boutique a few weeks ago, there was a 3 page waiting list for the Galliera, a bag that has been out forever and that costs $1200!

So it seems we are in a whole new world as far as recessions go. Mom's in higher tax brackets don't seem to be feeling the pinch.
 
#13
Only Coach will decide the prices.....and we as consumers vote with our dollars. Their profit margin does NOT demand a change in prices, IMHO. I just bought three high end bags this week - all from Ebay or Bonz. I don't think I have it in me to go into a Coach boutique and buy a bag without a PCE for $1000. Not when there are PCEs, outlets and secondary sources of bags.
 
#15
buttercup784eve said:
I just read an article that said that the luxury brands like Louis Vuitton, Gucci, and Burberry are having record sales this year. Louis Vuitton especially expected a downturn and cut production accordingly. Now they are facing a world wide shortage. When I went to their boutique a few weeks ago, there was a 3 page waiting list for the Galliera, a bag that has been out forever and that costs $1200!

So it seems we are in a whole new world as far as recessions go. Mom's in higher tax brackets don't seem to be feeling the pinch.
Click to expand...

I saw articles earlier in the year like that, which included Coach. Handbags made a big comeback this year--but they were not thriving sales wise til this year. It is a good year for Coach in 2010, that's for sure, as well as their competitors.
 
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