Coach sales exceed expectations
Luxury goods brand Coach has posted sales of $761 million for its first quarter ended September 26 compared with $753 million in the same period in 2008, an increase of 1%. Net income for the quarter totalled $141 million compared with $146 million in the prior-year period and gross profit declined 1% to $550 million from $558 million.
During the first quarter, the company opened 10 retail stores in North America, including eight in new markets, and five factory stores, bringing the total to 340 retail stores and 116 factory stores as of September 26. In Japan, the company opened two locations, taking the total to 162 at the end of the quarter. In China, five new locations were opened during the quarter, taking the total to 33.
Lew Frankfort, chairman and chief executive officer, said: “The launch of [bag and shoe brand] Poppy in July, along with our new pricing strategy, which gives the consumer more choices at prices she is willing to pay or is able to afford, resulted in an increased sales penetration of handbags”.
He continued: “We’re also extremely enthusiastic about the response to Coach in China, where we are continuing to experience rapid growth for both Coach and the imported accessory category. We’re also pleased to announce the opening of our first mainland China flagship store, planned for spring 2010 in Shanghai. The 7,000 square foot store will reflect Coach’s latest global flagship design. To support our growth in China, we are also planning to open an Asia distribution centre, also in Shanghai, before the end of our fiscal year, allowing us to better manage the logistics in this rapidly growing region for Coach.”
He also suggested things were looking up for the company long term. “While we continue to plan conservatively, we believe that we’re well positioned for the seasons ahead,” he says. “We’re also squarely focused on the abundant growth opportunities available to us as we begin to emerge from this downturn.”
