Interesting Article on Forbes on Coach Sinking North American Sales

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#106
Luv2Shop1 said:
Another couple of interesting articles--

http://www.forbes.com/sites/greatsp...can-regain-its-market-share/?partner=yahootix

http://www.forbes.com/sites/greatsp...oach-divided-against-itself/?partner=yahootix
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Thanks for posting this, I find it very interesting.

They are closing 20 Coach stores and opening 15 Factory stores.

They are going to have 3 sales channels, Factory, Flagship and couldn't really figure out the 3rd one.

They are going to have different products for each channel.

They are pushing the per unit price much higher so they can try to squeeze more profit that way.

Should be interesting to see what happens in the Fall, I'll be sitting on the sidelines with some popcorn.
 
#107
This paragraph sums up Coach's true issue IMHO .....

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Factory sales comprise nearly 70% of Coach’s total retail business, up from 40% a decade ago. This is a worrying trend for two reasons :

The factory sales figure figure represents nearly 50% of total sales, a percentage that is too high for a true luxury company.

Given the easy availability of information on the Internet, and the pre-shopping opportunities of selection that it provides, it is possible that customers who want to buy Coach’s products are foregoing shopping in its retail stores and waiting for the same products to come up at its factory outlets, at lower prices. This might be the factor that is causing same store sales for Coach to go down.

If this trend continues, it might become increasingly difficult for the company to charge a full price for its products."

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If they can crack to code to this, they may win the war - but the discount lovers (me included) are winning the battle at the moment.
 
#108
tannedsilk said:
This paragraph sums up Coach's true issue IMHO .....

-----------

Factory sales comprise nearly 70% of Coach’s total retail business, up from 40% a decade ago. This is a worrying trend for two reasons :

The factory sales figure figure represents nearly 50% of total sales, a percentage that is too high for a true luxury company.

Given the easy availability of information on the Internet, and the pre-shopping opportunities of selection that it provides, it is possible that customers who want to buy Coach’s products are foregoing shopping in its retail stores and waiting for the same products to come up at its factory outlets, at lower prices. This might be the factor that is causing same store sales for Coach to go down.

If this trend continues, it might become increasingly difficult for the company to charge a full price for its products."

---------------

If they can crack to code to this, they may win the war - but the discount lovers (me included) are winning the battle at the moment.
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I totally agree. The factory outlets cheapen the brand and encourages clients to only buy heavily discounted items. I purchased almost all of my bags from coach.com, many at full price. Some were purchased with a PCE. I was shocked to find that others could get a limited edition bag like mine for over 70 percent off. Now I regularly browse the website and see how fast the styles change as the has-been "it" bag is deleted for the new "it" bag which will soon suffer the same fate. Not a good marketing strategy, Coach. Makes you look desperate and sad.

I look forward to the day when Coach execs will read this thread and do something about it. I love Coach and would love to get more bags, jewelry and accessories. I just don't know when that will be.
 
#109
I was dropped from the FOS email list, but I can still get in. But that definitely affected how many coach bags I buy at FP. Also, Coach can't seem to keep any medium size bags! They need to address that better. I'm sure lots of people want the Kelsey/Sophia size bags.
 
#110
I really think Coach is pricing out the women who buy its bags. Coach wants to be high end like Prada, LV, but it is not. Coach is losing market share to Michael Kors, his bags are primarily in the $200-300 range, where Coach used to be.
 
#111
Jennifoo said:
I totally agree. The factory outlets cheapen the brand and encourages clients to only buy heavily discounted items. I purchased almost all of my bags from coach.com, many at full price. Some were purchased with a PCE. I was shocked to find that others could get a limited edition bag like mine for over 70 percent off. Now I regularly browse the website and see how fast the styles change as the has-been "it" bag is deleted for the new "it" bag which will soon suffer the same fate. Not a good marketing strategy, Coach. Makes you look desperate and sad.

I look forward to the day when Coach execs will read this thread and do something about it. I love Coach and would love to get more bags, jewelry and accessories. I just don't know when that will be.
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Doesn't it make you mad when you purchase an expensive bag, then there is inventory turnover the following week and the purse that you purchased is not even in the store. I wish they would keep the same inventory for longer periods of time. Or simply release the spring line, then the fall line, all at once.
 
#112
I'm just confused. Why the strong desire to be a "luxury" brand? If you're making good money moving lots of purses at a lower price point, why don't you just stick with that? FP, overpriced bags are just gathering dust until they get discounted. Why not just price them lower in the FIRST place and keep offering coupons? It seems like Coach is overreaching, a stupid thing to do in this economy.
 
#113
Jadis4742 said:
I'm just confused. Why the strong desire to be a "luxury" brand? If you're making good money moving lots of purses at a lower price point, why don't you just stick with that? FP, overpriced bags are just gathering dust until they get discounted. Why not just price them lower in the FIRST place and keep offering coupons? It seems like Coach is overreaching, a stupid thing to do in this economy.
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They probably think they can make more money, because the price point of the bags would be higher. The problem is that you would have to convince consumers that can actually afford those higher prices that your products are worth owning. I don't see it happening.
 
#114
They probably think they can make more money, because the price point of the bags would be higher. The problem is that you would have to convince consumers that can actually afford those higher prices that your products are worth owning. I don't see it happening.
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I agree. Even though I end up liking some of the higher priced bags years later, I won't buy them at the high full price no matter how beautiful I think they are. Sometimes I feel like I have spent too much on a few of my ebay purchases, but then I remind myself that even if I had noticed them in stores when they first came out, I never would have bought the bags--and now I am able to get them at often less than half of the original price. I wouldn't have wanted to pay the full price, and I normally don't get to an outlet.
 
#115
I think Coach is opening more outlet stores and closing fp boutiques because they're going to stop sending fp bags to outlet. Outlet will have it's own line of bags and FP will have their more expensive line of bags and the two will not be intermingled like they are now.
 
#116
bobbyjean said:
I think Coach is opening more outlet stores and closing fp boutiques because they're going to stop sending fp bags to outlet. Outlet will have it's own line of bags and FP will have their more expensive line of bags and the two will not be intermingled like they are now.
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+1.........this is the direction I think they are going for, too. Doesn't Marc Jacobs do this with the 2 lines of handbags?
 
#118
I followed a link in another thread to the Coach Australia site. It is smaller with fewer bags and styles, but I found it very interesting that it has a 'sale' section! I wonder if that is where they could be going now in the US--Factory will be strictly a Factory line, and a sale section on the FP website/stores.
 
#119
I wish they would pick a side, to be a luxury brand with no outlets (or at least no MFF bags) or be a lower end brand with prices to match.

I'm disappointed that they are closing many FP stores and opening more outlets. I use to LOVE coach, but have sold almost all of my bags I once had. I don't like how they produce SO many MFF bags that look SO cheap. I feel like it cheapens the entire brand. No one wants to spend $500+ on a bag when they have an outlet store churning out mass produced cheap versions to make up their profits.
 
#120
The company is already minimizing the deletes section in Factory stores. Stopped by three stores yesterday and delete inventory is very small for both men's and women's. Men's clearance has been stripped of any large bags, besides some leftover FP fabric summer totes, and instead have been stuffed with MFF product.


It looks like the Factory website will be the only way to purchase a large selection of deleted merchandise in the near future.
 
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