Interesting article about Coach from FT

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  1. Coach to scale back US store openings

    By Jonathan Birchall
    Published: January 21 2009 18:02 | Last updated: January 21 2009 18:02


    Coach, the US leather goods and accessories brand, is to scale back planned new-store openings in the US and sell more lower-price handbags as it fights the slump in discretionary spending.

    Lew Frankfort, chief executive, described the recent Christmas period as the worst he had seen in 30 years but stressed that Coach had avoided discounting prices in its full-price stores to protect its brand.

    The company said second-quarter sales fell 2 per cent to $960m, while earnings fell 14 per cent to $217m, or 67 cents per diluted share.

    “We will continue to protect our brand,” he said, although the strategy meant that Coach’s more than 300 full-price stores had seen declining traffic at a time when “virtually the entire mall was on sale”.

    In addition to a previously announced 13 per cent fall in comparable store sales in North America, the company reported a 19 per cent drop in indirect sales through US department stores.

    Mr Frankfort said discounting by department stores had reached “unprecedented levels”, with Coach opting to exclude its products from the 50- to 75-per-cent price cuts seen in luxury stores such as Saks and Neiman Marcus.

    However, Coach has used its network of more than 100 factory outlet stores, where it sells end-of-line and lower-cost bags, to support sales.
    The retailer said it planned to respond to slower discretionary spending from this summer by “rebalancing” its mix of bags and other items to include more products in the $200 to $300 range, resulting in an estimated 10- to 15-per-cent drop in the average price of its products.
    “We realise that consumer spending after this period will not return to the same levels,” Mr Frankfort said.

    Coach will cut its planned expansion in North America from about 40 new stores a year to about 20. However, it said its plans for new stores remained unchanged in China, where it saw double-digit comparable sales growth during the quarter.

    ●So guess they won't be opening any store in the UK then:crybaby:
     
  2. Wow, that is interesting!
    The state of the economy is so stressful! I just hate hearing about it but it's a fact and we all have to deal with it...I guess.
    I'm very glad and impressed that they are not "bargain basementing" the brand though. Sure it would be nice to go into a boutique and get 50% off but it would ruin the brand eventually. It's a luxury and I'm so glad they are keeping it that way. (heck with 4 daughters, it's the only luxury I get right now :P)
    Thanks so much for posting this!!
     
  3. there is a coach store in Heathrow airport, FYI
     
  4. good article thanks for posting it
     
  5. tks for posting
     
  6. Yes, but it's the other side of customs (so you have to be flying out to somewhere to visit). They won't ship either as I phoned to ask about the fox keyring end of last year and was told by a rather snooty sales person that I had to "visit the shop in person don't you know".

    So...any Coach purchases I make tend to be via Evilbay.