China still the star for Coach
Leathergoods brand Coach has reported lower income for the quarter that ended on June 27. It achieved profits of $145.8 million compared to $213.5 million a year earlier. Sales reached $777.7 million, down from from $781.5 million.
Sales in stores in North America were 6.1% down, while the drop in Japanese stores was 4%. However, the company said demand in China was very strong, with same-store sales there rising at a double-digit rate.
Chief executive, Lew Frankfort, told Reuters: “It’s early days for our new quarter, but four weeks into it, we definitely see a sequential improvement in traffic.” But he predicted that consumers in many markets would remain cautious for the rest of this year.
To appeal to more cost-conscious shoppers, Coach is introducing more bags in the $200 to $300 range, and has said it expects the reduce overall prices by between 10% and 15%.
Coach will open 20 new retail stores in North America this year, down from the 40 stores in each of the past two years. However, it has accelerated plans for China, saying it now expects to open about 15 new stores there, up from about 10 previously targeted.
