Interesting Article on Forbes on Coach Sinking North American Sales

[handbags4me]

Interesting quote from a paragraph in the story. "We continued to be disappointed by our performance in North America, which was impacted by substantially lower traffic in our stores and by our decision to limit access to our e-factory flash sales site,” Luis said.


http://www.forbes.com/sites/maggiem...n-earnings-miss-north-american-sales-decline/

As someone who was one of the first to be locked out of FOS (and still not in), part of me is thinking "Ha - that's what you get". It's important for the leadership of the company to understand the significant impact of customer retention. Coach used to be my #1 brand and I spent a large portion of my disposable income on Coach. Since the sour feeling of being "locked out" (apparently for buying too many bags), I've turned my attention (and my $$) to Dooney, MK, Kate Spade, Tory Burch, and others. I don't love handbags any less, I just love Coach a lot less. Since I don't have unlimited funds to spend on my obsession, Coach will continue to get less "share of wallet" from me. Coach's competition is real and the brand won't survive if the women's handbag line doesn't succeed and grow - shoes/wearables/mens just won't carry it. As a public company, analysts and shareholders won't respond lightly to decisions that result in missed performance targets so interested to see how they plan to turn this decline around.

 

[carinas]

I've been trying to find down time today to post about the earnings call. As an investor (DH took a shirt position, wisely, a few months back) I am not surprised at all that Jim Cramer from The Street has compared Coach to JC Penny. A few of us here on tpf had done that not too long ago , in fact. Am posting tidbits of that article here, for anyone who is interested....View attachment 2473688View attachment 2473689

Thank You for the great article! Just like others, I'm not surprised at all by these news!

I also vote for a sticky thread where to post and read news and articles of that matter.

 

[CA-Anonymous]

As someone who was one of the first to be locked out of FOS (and still not in), part of me is thinking "Ha - that's what you get". It's important for the leadership of the company to understand the significant impact of customer retention. Coach used to be my #1 brand and I spent a large portion of my disposable income on Coach. Since the sour feeling of being "locked out" (apparently for buying too many bags), I've turned my attention (and my $$) to Dooney, MK, Kate Spade, Tory Burch, and others. I don't love handbags any less, I just love Coach a lot less. Since I don't have unlimited funds to spend on my obsession, Coach will continue to get less "share of wallet" from me. Coach's competition is real and the brand won't survive if the women's handbag line doesn't succeed and grow - shoes/wearables/mens just won't carry it. As a public company, analysts and shareholders won't respond lightly to decisions that result in missed performance targets so interested to see how they plan to turn this decline around.

Amen to that!!! This is my position and sentiments exactly.....

By biting many of the hands that have fed its bottom line over the years, Coach has pissed off and pushed away a LOT of its loyal customers (who are frequently mistaken for resellers!?!?..I've said it time and time again over the years, I don't understand why Coach can't team up with the auction sites (with the users' permission) and do research to see who the actual re-sellers are instead of making assumptions based on some kooky logic, of amount spent/purchase of duplicates-same style diff color etc........Hello Coach, some of us just BUY a lot (or bought, I should say) because we are handbag obsessed, NOT because we are resellers....<rant over>
Maybe one day they'll figure this out...time will tell.

I also have moved on from Coach and my disposable income has definitely gone from Coach's pockets to other companies.

 

[tannedsilk]

As someone who was one of the first to be locked out of FOS (and still not in), part of me is thinking "Ha - that's what you get". It's important for the leadership of the company to understand the significant impact of customer retention. Coach used to be my #1 brand and I spent a large portion of my disposable income on Coach. Since the sour feeling of being "locked out" (apparently for buying too many bags), I've turned my attention (and my $$) to Dooney, MK, Kate Spade, Tory Burch, and others. I don't love handbags any less, I just love Coach a lot less. Since I don't have unlimited funds to spend on my obsession, Coach will continue to get less "share of wallet" from me. Coach's competition is real and the brand won't survive if the women's handbag line doesn't succeed and grow - shoes/wearables/mens just won't carry it. As a public company, analysts and shareholders won't respond lightly to decisions that result in missed performance targets so interested to see how they plan to turn this decline around.

Right!!

Sales 101 -- The cheapest customer to acquire & keep is the return customer, the second is referred customers. Coach have significantly cut off two of their main revenue streams. They think they can re-brand, raise prices, acquire and cultivate new customers all at the same time. Unsurprising results, lets hope they can turn it around.

 

[katierose]

I'm not surprised Coach sales have fallen.
First of all, their FP stores are uninspiring and boring and half empty, especially so when compared to stores like Michael Kors, where the store shelves are filled with wonderful merchandise. Now the outlet stores are looking the same, boring.
Most Coach stores (90+%) don't even carry the top of the line bags. One has to know about them before going into the store, and then take a leap of faith and order without seeing the bag first. Is it any wonder that they don't sell a lot of over $500 bags? LOL.

Add to that the way they have been treating their best customers by banning them from their FOS sales, or from buying altogether, and not only have they lost sales, but these customers move on to other designers, and those other designers sales percentages pick up. Plus it's just bad customer relations and the word gets around that Coach doesn't appreciate it's customers. All this in order to curtail resellers, when we all know they can buy the bags one way or another, and all they are really doing is turning away good business and insulting us, their buying base...

 

[September24]

Yep, I've moved onto other designers who want my money, sold all of my Coach and I'm very happy

 

[lorihmatthews]

I still buy Coach bags, because there are styles that are out there that I enjoy. I've especially loved the Candace and mini Tanners.

However, from an investing perspective, I just sold my Coach stock a few weeks ago because it just wasn't performing. I will be taking that cash and buying another stock with the proceeds.

 

[melissatrv]

I am not surprised in the least, honestly. This new direction they have went in has scared a lot of people away. Including myself and a lot of other long time tPFers.
Juicy Couture has sold out to Kohls (or so I've heard) so if Coach doesn't do something eventually they will be looking to sell out as well. And the articles make a great point about Coachs ambitious price points. I like how now most of their buyers are the $200 or less outlet crowd and they still expect to "sell out" these $7-800 bags. Lol. They might as well be only MFF and never do a front line. And focusing on banning resellers is such a waste of time when they need to be worrying other things. Once someone buys your product they be able to do whatever the heck they want with it. It's just one of those things you can't win.
Just in my opinion, Coach used to be fun and unique even if it was mass produced. Now it's just plain and boring and mass produced. I know I have an unpopular view and please don't bite my head off. I used to at one time have 95+ bags, all by Coach.
I have not bought anything new since they changed Madison and I'm still not interested. And I'm not the only one.

I hear you. I think the merchandise that they had out during the holiday season was extremely lackluster. (Where are those Poppy Sequin bags when you need them? ) Also with Coach being boring now. I know there are HUGE fans of Legacy and Borough bags so I mean no offense but these bags, though classic, are rather plain. You have to admit. Though there are tons of people who like these styles Coach has lost the audience that liked the differentiating factors of the older Madison and Poppy collections. Now Madison and Poppy look like all the other bags, I cannot distinguish one line from the other. Also the quality of the leather has done down. The prices are the same but the leather is thinner and the hardware is lacking. Heck we don't even have a hardware logo anymore!!

And though Coach is betting big on Borough, I think they should have included it in PCE. It is still a higher end bag even with PCE if they are wanting to move that way. Borough launched around the holidays and it would have been a big bang to this launch to include them in a few holiday PCEs. It is obviously impacting their sales as most of their target audience cannot or will not pay $600 for a Coach bag

Sorry I have to throw in their Mini bag focus. I see bags I like but they are either large or Mini. Whatever happened to the small/medium bag??? Or at least alternate and occasionally sell that size in popular styles. Another reason I don't buy anywhere near the volume I had previously.

I used to hate Michael Kors but have been into MK lately. Their Selma bag is flying off the shelves!! Some say it is a copy of the Tanners but there is something about this bags that have the sophisticated look of Sophia look too. And they are not just plain leather with a tassel. They have studs, jewels, embossing, grommets as well as plain styles. Coach used to have this look in Madison and Poppy and I know a lot of people are missing this. Sure keep the more classic styles but include some blingy Madisons and youthful Poppy bags too.

Think about this.....if Coach is having PCEs like crazy, every other week it seems....but the bags in the full price stores are not selling. But two years ago, at the height of the recession, with fewer PCEs, Coach was Wall Street's darling, that tells me that the problem is the bag styles. THAT is where they need to look and invest.

Darn auto correct. DH took a *short* position a few months back. (Though he does buy a lot of shirts lol)

What is the capsule collection you mentioned? The Borough bags?

 

[melissatrv]

I'm not surprised Coach sales have fallen.
First of all, their FP stores are uninspiring and boring and half empty, especially so when compared to stores like Michael Kors, where the store shelves are filled with wonderful merchandise. Now the outlet stores are looking the same, boring.
Most Coach stores (90+%) don't even carry the top of the line bags. One has to know about them before going into the store, and then take a leap of faith and order without seeing the bag first. Is it any wonder that they don't sell a lot of over $500 bags? LOL.

OMG I agree. Their new look is horrible And my outlet looks dreary now too. They do need to spruce up the stores. If as the article says "in store" sales have fallen. I wonder if "in store" means outlets too. I have already elaborated on why full price sales have fallen IMO. With regard to in store outlet sales, the problem is simple. Lack of deletes. Or deletes are severely limited to stores that are flagship outlets. I am not going to truck my cookies one hour to my outlet that has NO deletes. Instead I will try my luck on FOS. And even there the deletes are sparse. Ir sell out by 7am EST. Remember how much fun it used to be going to the outlets to see what lucky finds were there? And remember all the reveals we would have on Sunday and Monday from all the weekend outlet shopping? Waiting to see what lovely deleted treasures our fellow TPFers would find at their outlets? Very sad. Very sad indeed.

 

[katlun]

Add me to the list of not shocked

Years ago Coach combined their income from retail & outlet in their balance sheet, that alone let people know that they had sometime to hide where the main income came from

They send out coupons every month and then wonder why no one is buying at retail - also so many store heavily discount Coach

Their problem is getting control of their brand without pissing off the customer

 

[Hyacinth]

Hmmm... I can still get into the factory site. I don't receive the emails anymore, however, from either Coach or Factory, even though I keep signing up when they send me "stay in touch" emails...

Exactly! You really have to wonder what kind of IDIOTS are in charge of their computers' customer records. I've had the same experience - I keep getting those "Stay in Touch" emails at the same addy that I use for all my online purchases and where I just responded to the same blasted email three weeks earlier and received a confirmation that I was back in their records. Three weeks alfer I'm getiing the same blasted Stay In Touch mail! :censor:

Add to that all the customers who have signed up for the FOS list and have never received an invite, and it looks like all those customer addys are falling into a huge black hole. WTF is wrong with a company that keeps losing or deleting the addys and information of its customer base???

Let's hope that with new management, someone at Coach gets his or her head out of their nether regions where it seems to have been stuck and actually tries to figure out the problem. Asking their customers would be a good start, especially the ones whose addys they keep losing.

Or they could come here if they REALLY want to get an earfull!

 

[melissatrv]

Add to that all the customers who have signed up for the FOS list and have never received an invite, and it looks like all those customer addys are falling into a huge black hole. WTF is wrong with a company that keeps losing or deleting the addys and information of its customer base???

Let's hope that with new management, someone at Coach gets his or her head out of their nether regions where it seems to have been stuck and actually tries to figure out the problem. Asking their customers would be a good start, especially the ones whose addys they keep losing.

Or they could come here if they REALLY want to get an earfull!

This is exactly what they SHOULD do. I am not saying this because I frequent this forum. I work for a large fortune 500 (not in the fashion industry) and we have people called "Community People" who are marketing mgrs. for whom their full time job is to monitor and get the "pulse" of their community....including forums, social media, online groups etc. My job is similar to this. Most of the time we just monitor and do not post or disclose we work for XYZ company but report back to upper mgmt. on what our customers are saying. But they do not always heed this feedback!!

I have long suspected Coach does this. There are a few forum members who post info on bags before everyone else. Anyone can figure out how to use the drilldown with the style numbers but how do these folks get so many style numbers we have not heard of yet? By randomly keying in numbers and color combos? Hmmm Not a bad thing at all if they do work for Coach or a market research firm Coach has hired. In fact I hope that is exactly what they do because if not, Coach should do this and are missing an opportunity to hear what their most passionate customers think.

 

[Vanessa17]

It's the business model that seems to be part of the problem. I don't know of any other brand that produces bags for the outlet (MFF) on such a mass scale. I think it cheapens the brand and it's why Coach items just don't hold their value. Along with all the gimmicks and so on of 'Coach math'?

I can't think of any brand that bans 'resellers' when Coach is the one actually feeding the habit.

I personally don't buy much Coach because the price here is Australia is absolutely ridiculous. I understand import duty, taxes etc but when we are charged $2000.00 plus for bags that are $1200.00 in the US, you are really headed into LV price range. I would not think twice about walking into LV over Coach in that instance. A gathered Lindsey here is $1000.00. Key chains are around $80 here. My options are either Ebay or during a holiday to the US and as we all know, the outlets are a fickle place. I find SA's are not too interested in helping either as they know you will not be a regular customer. The whole thing is such a turn off and it has lead me to focus on other brands. In my opinion, as far as outside the US goes, Coach either needs to be in the same league as Louis Vuitton and others, or stop pretending to be. Just an outsider's experience.

In my opinion, Coach needs to stop the gimmicks (FOS banning, reselling banning, Coach math) and focus on producing quality items.

 

[jailnurse93]

I think that's exactly what Luis meant when he said "limiting access to our e-factory flash sales site" was a contributing factor. For me personally, being locked out of FOS turned me away from ALL Coach, and I was practically a fixture at the boutique store. Not anymore, though. Way to go, Coach! Insult your best customers then expect good business results. Yeah.

....and I've been LOVE LOVE LOVIN' the bags that you've bought since you've been shunning Coach! Awesome leather.

I haven't been buyin' anything for awhile. Don't have any closet space; I like what I have and I really want to have that want for a bag before a get the next one. I posted on the FOS thread the other day that I'm probably going to get banned for NOT buying now.

 

[proffashionista]

I hear you. I think the merchandise that they had out during the holiday season was extremely lackluster. (Where are those Poppy Sequin bags when you need them? ) Also with Coach being boring now. I know there are HUGE fans of Legacy and Borough bags so I mean no offense but these bags, though classic, are rather plain. You have to admit. Though there are tons of people who like these styles Coach has lost the audience that liked the differentiating factors of the older Madison and Poppy collections. Now Madison and Poppy look like all the other bags, I cannot distinguish one line from the other. Also the quality of the leather has done down. The prices are the same but the leather is thinner and the hardware is lacking. Heck we don't even have a hardware logo anymore!!

And though Coach is betting big on Borough, I think they should have included it in PCE. It is still a higher end bag even with PCE if they are wanting to move that way. Borough launched around the holidays and it would have been a big bang to this launch to include them in a few holiday PCEs. It is obviously impacting their sales as most of their target audience cannot or will not pay $600 for a Coach bag

Sorry I have to throw in their Mini bag focus. I see bags I like but they are either large or Mini. Whatever happened to the small/medium bag??? Or at least alternate and occasionally sell that size in popular styles. Another reason I don't buy anywhere near the volume I had previously.

I used to hate Michael Kors but have been into MK lately. Their Selma bag is flying off the shelves!! Some say it is a copy of the Tanners but there is something about this bags that have the sophisticated look of Sophia look too. And they are not just plain leather with a tassel. They have studs, jewels, embossing, grommets as well as plain styles. Coach used to have this look in Madison and Poppy and I know a lot of people are missing this. Sure keep the more classic styles but include some blingy Madisons and youthful Poppy bags too.

Think about this.....if Coach is having PCEs like crazy, every other week it seems....but the bags in the full price stores are not selling. But two years ago, at the height of the recession, with fewer PCEs, Coach was Wall Street's darling, that tells me that the problem is the bag styles. THAT is where they need to look and invest.



What is the capsule collection you mentioned? The Borough bags?

This is very thoughtful and insightful. Very clear and logical, my friend..... Oh and yes, capsule includes boroughs as well as urbane and the clutchables....

Ps. Ditto on the before and after feelings toward MK bags. What a coincidence....not! We've tended to gravitate toward similar styles .....