Interesting Article on Forbes on Coach Sinking North American Sales
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Oh, I don't think so. You are kind to comment as such.
I'm just really thinking that affordable and/or affordable luxury businesses are in jeopardy. I see a parallel between what happened to regulated businesses in the 90s and early 00s after mid 1980 deregulations. Only the very fittest made it (AT&T , American Airlines , etc) And now we will see this effect with banks. Resultantly, only the strongest retailers appear ready for the sail. ....
I'm just really thinking that affordable and/or affordable luxury businesses are in jeopardy. I see a parallel between what happened to regulated businesses in the 90s and early 00s after mid 1980 deregulations. Only the very fittest made it (AT&T , American Airlines , etc) And now we will see this effect with banks. Resultantly, only the strongest retailers appear ready for the sail. ....
The demographics of the mainstream shopper there hint towards how those shoppers can't buy like they used to...or at all. It's not only online shopping , per se, that's heading them into the tougher times they faced and still do face. The JCP CEO who tried to bring them back didn't achieve success; he got voted out. All his fault? I dare say, no. That is, It also appears to be an issue of how the loyal JC Penny shopper may want to remain a loyal shopper , but can't. In this way, I see yet another comparison to Coach. Some of the loyal shoppers may no longer be able to buy Coach, even if they still wish to do so. Just as Tweeter had happen...or Applebee's, or Bennigans, or Crabtree and Evelyn (one of few who emerged from bankruptcy successfully) and now we hear how Red Lobster is an albatross and in jeopardy.... The list of middle income "affordable fancy" places that have gone under or struggle perilously now is long. Frighteningly long.
And so what might Coach also be grappling with? Perhaps how to keep or bring those who can still afford to purchase Coach to find them "sexy" and upscale. And frankly, some from this demographic pool see Coach as a "demotion" UNLESS Coach ups its game and starts to do as the Romans do. That is, create and price products that will appeal to this demographic that don't have Coach on their radar, unless really really really compelled to do so.
I have to disagree with you here Prof. If it were a matter of affordability why is Michael Kors or Juicy flying. I was a shareholder in Coach stock and sold out of my position last year. A very smart man, Peter Lynch, advised " buy what you know". I purchased my stock in 2010, and became a member of tpf. Back then the Coach thread was hot , many familiar faces have disappeared and moved on to other brand due to, in part, to Coach's devaluing there brand and insulting a lot of there customer base by closing them out of FOS. I felt it was time to move out of the investment as I was listening to what the forum members were complaining about and the actions they were taking as a result of being banned. I was taken back when I heard Cramers comparison of Coach to JCP. I have also been around long enough to witness Coaches "desperate moves" outlet adding an extra 30% off during labor day to get sales up before another quarter ends. So strickly from a shareholders perspective I sold my stock.
I still love the brand. But I also am trained to wait until the bag I love goes to the outlet or ebay , because as we have all learned 98 % of them do. Coach has also trained me to think that if it doesn't make it, there is always another one I will love. Sophia is my example. I fell hard for the large Sophia's bought 4 of them when they first came out. I watched as Coach ran them into the ground by extending that style 2 years, made it in every texture and color, then turned around and really slapped my face and made an mmf version to squeeze every last cent of a well designed bag. That experience left me learning that the beautiful, SPECIAL, bag I purchased wasn't so special after all. And I want to feel I am special when I make a $600 + purchase.
Will Borough go the way of Sophia, I don't know, but the spring collection has a lot of different colors coming and I understand they will continue into summer +.........
Just MHO.
Great post. I like your take esp on the microeconomic issues you've raised. From a macro standpoint , the analysis would stray from these points and focus on big picture economic data. (Why I made sure to qualify such perspectives in earlier post) A few will survive ie Coach or MK. But more will fall off as time evolves. Or get snatched up in a fire sale...or so it's looking.
Great g
Great g
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Yes we have, so funny about that! I don't look at MK as following the "next big thing". I still have money to spend on bags in the Coach price point. And since they are not making the styles I care for, I will go to whoever does. If Coach starts making styles I like again, I will buy more. The reason I stick around this forum is because I hope they do!!
I loved your analysis too. I don't think Coach is going under by any means or the way of JCP. But it is very clear that they had a bad quarter. Much worse than projected and the stock drop and the comments from Wall Street should be a wakeup call to get their game on. I certainly think they have a chance to do so. I think a lot of companies who fail are the ones who stop listening to their customers or try to stretch and become something they are not to the detriment of their core and successful products. Sort of like the little neighborhood pizza joint that expands and becomes a full fledged restaurant. They are trying too hard, stretched too thin and the pizza suffers. And the customers stop coming. Coach should focus on women's handbags and small leather goods etc instead of Men's shoes and $400 sweatshirts
Ps. Love that lynch quote now and always. I used to paraphrase it to say, "buy the stock, not just the stuff!"
I won't bother restating the same points others have made that I agree with but will add something I think bites Coach in the rear. They need to make drastic changes to their return policy. It's way too liberal. I don't know any store that has NO time limit on making returns. How can allowing someone to return a bag 1, 2, 3 or more years after they purchased it make good business sense? It can't. The item has long since been discontinued and after time the item can't be in new condition - tags or not. Then there are the ones that buy, hold on to and then return once the bag has hit the outlet. How does that make good business sense? Again, it doesn't. I think 60-90 days is more than a sufficient amount of time to decide if you want to keep something or not. And then there's the inconsistent policies that Coach uses. I won't get started on that though... I love Coach. Probably always will but it's this and the other points people have made that have me looking elsewhere for now.
explains why coach snail mailed me a code and 2 codes to use for myself. 
if coach snail mails me another, i might just throw the code to my neighbour who will probably go on a shopping spree at coach to show off her purchases overseas.
if coach snail mails me another, i might just throw the code to my neighbour who will probably go on a shopping spree at coach to show off her purchases overseas.
For me, and other buyers like me, the general availability of Coach and the CONSTANT turnover of styles, colors, etc makes it impossible to buy.
I don't want a bag that everyone and their mother, 12 year old daughter, AND grandmother has.
Nor do I want to pay even 25% off retail for it only for new colors to come out 2 weeks later.
They need to slow down their collection offerings, and frankly close the outlets. I won't buy from a brand that does MFF stuff, and that includes Michael Kors. Every time I carry a coach bag I hear "OMG! you can go to the outlet and get a $450 bag for $100!" and that really bothers me as a consumer of high end goods. I don't have the time to stalk the outlet for deletes or buy things on ebay. I want to go in the store, purchase an item I like, and not see it on a pile of cheap bags on sale at macy's the next week.
I don't want a bag that everyone and their mother, 12 year old daughter, AND grandmother has.
Nor do I want to pay even 25% off retail for it only for new colors to come out 2 weeks later.
They need to slow down their collection offerings, and frankly close the outlets. I won't buy from a brand that does MFF stuff, and that includes Michael Kors. Every time I carry a coach bag I hear "OMG! you can go to the outlet and get a $450 bag for $100!" and that really bothers me as a consumer of high end goods. I don't have the time to stalk the outlet for deletes or buy things on ebay. I want to go in the store, purchase an item I like, and not see it on a pile of cheap bags on sale at macy's the next week.
When Cramer compares Coach to JCP it does make you think, what is Coach doing wrong?
We know JCP has been a hot mess for years, but Coach is a brand their mother or grandmother purchased, there is loyal customers but how many of them now buy a Coach item at full price? I can tell you I have only done that once and then I got a PCE - when they were only 4 times a year not every month, and lets not forget the outlets or department store bargains and now Zappos.
Coach as someone also mentioned needs to make be on social media and I do not mean just FB but all social media.
We know JCP has been a hot mess for years, but Coach is a brand their mother or grandmother purchased, there is loyal customers but how many of them now buy a Coach item at full price? I can tell you I have only done that once and then I got a PCE - when they were only 4 times a year not every month, and lets not forget the outlets or department store bargains and now Zappos.
Coach as someone also mentioned needs to make be on social media and I do not mean just FB but all social media.
Serves them right for shutting out so many TPF members from FOS! I think that is responsible for a drop of several percentage points!LOL
Amen! I've been locked out since 12/1/13 and my bank account is happy! I bought one bag on sale from Belk and three from eBay since then, and that's all!
I am also someone who has owned Coach stock in addition to being a loyal customer and, although I haven't been treated poorly, they have treated many of their customers poorly by banning people from buying even after they've proven they aren't selling online, FOS lockouts, etc. I am also conditioned to only buy on sale with Coach, and although I haven't purchased much from them over the last couple of years, the Madison and Borough have caught my eye. That said, there are too many options for alternatives for them to not take customer loyalty seriously. They are squandering goodwill and the cheapest customer is the loyal, returning one so spending money to attract new buyers at the expense of existing ones, in my opinion, is just damn stupid.
I wonder if the ability to return things at any time is at odds with the 'trying to ban eBay' sellers. For example, if they changed their return time to 30 days, wouldn't that make the issue go away to an extent? Some people selling on eBay need their inventory to sit for awhile so, right now, they can keep it online six months and return without issue. If they had to return it in 30 days, it might change some of the selling dynamics. Me, personally--I think if you bought it, you should have the right to do whatever you like with it as long as you aren't claiming to act on behalf of the company or brand. You paid for it, it's yours.
I don't know that I would equate the brand with JCP because JCP had trouble in large part because they eliminated all coupons and discounts for awhile as a new strategy and saw their customers drop them like a bad habit. Maybe some similarities to the FP/outlet delete issue but not quite because Coach hasn't eliminated discounts entirely, although they seem to apply them in a random and destructive fashion. I love the brand but I have to say that I don't understand many of their decisions.
I wonder if the ability to return things at any time is at odds with the 'trying to ban eBay' sellers. For example, if they changed their return time to 30 days, wouldn't that make the issue go away to an extent? Some people selling on eBay need their inventory to sit for awhile so, right now, they can keep it online six months and return without issue. If they had to return it in 30 days, it might change some of the selling dynamics. Me, personally--I think if you bought it, you should have the right to do whatever you like with it as long as you aren't claiming to act on behalf of the company or brand. You paid for it, it's yours.
I don't know that I would equate the brand with JCP because JCP had trouble in large part because they eliminated all coupons and discounts for awhile as a new strategy and saw their customers drop them like a bad habit. Maybe some similarities to the FP/outlet delete issue but not quite because Coach hasn't eliminated discounts entirely, although they seem to apply them in a random and destructive fashion. I love the brand but I have to say that I don't understand many of their decisions.