Market Intelligence Center  Nov 3  Comment 
Coach Inc. (COH) presents a trading opportunity that offers a 5.84% return in just 108 days. A covered call on Coach at the $31.00 level expiring on Feb. '16 offers an assigned return rate of 5.84% or 19.73% annualized. This trade offers 7.72%...
Clusterstock  Nov 2  Comment 
This could be one of the smartest business decisions Tory Burch ever makes. Speaking at the WWD Apparel & Retail CEO Summit in New York last week, Burch said she was not going to take her namesake fashion company public. "I think being a...
Clusterstock  Oct 27  Comment 
Coach made a classic mistake. Looking to exploit its popularity, the company fell into a trap that's snagged many high-flying retail brands: It expanded fast, opened outlet stores, and started to offer discounts to keep customers coming...
Benzinga  Oct 27  Comment 
Coach Inc (NYSE: COH) shares are trading higher by $1.44 at $31.76 in Tuesday's session. The catalyst for the rally is a penny beat for EPS on slightly lower revenue. After nearly a $2 higher open, the issue rallied to $33.08 before reversing...
Forbes  Oct 27  Comment 
In early trading on Tuesday, shares of Coach (COH) topped the list of the day's best performing components of the S&P 500 index, trading up 6.5%.  Year to date, Coach has lost about 14.0% of its value.
newratings.com  Oct 27  Comment 
WASHINGTON (dpa-AFX) - Coach Inc. (COH), a design house of modern luxury accessories and lifestyle brands, Tuesday reported lower profit for the first-quarter, but adjusted earnings topped Wall Street estimates. The stock climbed close to 4...
newratings.com  Oct 27  Comment 
WASHINGTON (dpa-AFX) - Coach Inc (COH) released a profit for first quarter that decreased from last year. The company said its profit dropped to $113.1 million, or $0.41 per share. This was lower than $145.8 million, or $0.53 per share, in last...
MarketWatch  Oct 27  Comment 
Coach Inc. on Tuesday reported quarterly profit that came in higher than Wall Street's consensus estimate, although sales skirted below expectations. The luxury-goods maker said fiscal first-quarter profit was $96.4 million, or 35 cents a share,...
Forbes  Oct 26  Comment 
Among the underlying components of the S&P 500 index, we saw noteworthy options trading volume today in Comcast Corp (NASD: CMCSA), where a total of 60,488 contracts have traded so far, representing approximately 6.0 million underlying shares....


Coach Inc. (NYSE: COH) is a leading retailer of premium handbags and accessories, located primarily in North America and has recently expanded into Asian markets. Basing its image on "affordable luxury," Coach seeks to establish a premium brand that caters to affluent consumers but also provides lower-priced goods to appeal to the demand of middle-class customers.

Due to its effective merchandising and brand-building, Coach has boasted high operating margins and increasing popularity within the U.S. and Japan for years, even in the suffering American economy. COH also intends to take advantage of increasing luxury consumption in China by taking more control of its retail operations there and building its own stores instead of relying on third-party retailers. As COH continues to develop its ultra-luxury collections, it will share in the recent increase in spending in luxury good markets as the affluent release pent-up spending power from the last year. [1]

Business Overview

Coach is a leading American manufacturer and retailer of leather goods, accessories and apparel for men and women. Coach occupies the affordable luxury segment, which provides high-end merchandise for both high and middle-income consumers. For example, prices for a Coach handbag can range from $298 to $6,000.[2]

Business Segments

Coach is divided into three main revenue segments:

  • Handbags (63% of net sales): There are usually 3 - 4 collections per quarter and 4 - 7 styles per collection. These collections feature classic and fashion designs.
  • Accessories (28% of net sales): These include small leather goods, novelty accessories, and belts.
  • Other products (9% of net sales): These include footwear, business cases, jewelry, wearables, sunwear, travel bags, fragrance, and watches.[3]

Trends and Forces

Coach Seeks to Take Advantage of China's Growing Affluent Class

Coach has primarily stayed focused in North America and Japan. However, China is becoming an increasingly important market for luxury retailers. The rise of China's middle class has led to an increase in disposable income and thus an increase in potential customers. China spends more than $2 billion a year on luxury products.[4] What this means is that there is a growing affluent class in China that is capable of purchasing Coach products across all price points.

Luxury Image Essential for Sales

As with any luxury or affordable luxury retailer, Coach heavily relies on an image of exclusivity to fuel interest and sales of its products. A luxury company can lose its "luxury" status if the brand becomes too popular or too accessible. Coach thus takes a risk by having factory stores that sell discounted merchandise. None of Coach's competitors, such as Louis Vuitton and Gucci, have factory stores--they would be in direct opposition to the air of exclusivity the brands seek to cultivate. However, Coach protects its luxury status by placing its factory stores at least 60 miles away from its full-price locations.[5] In addition, the factory stores never sell the latest merchandise--they sell last year's or irregular pieces in addition to products that are manufactured specifically for the factory store. Coach never has sales at its full-price stores and does not allow retailers such as Macy's Inc. (M) to discount its merchandise. The result of these actions is that the factory stores and flagship locations serve two different demographics and are separate enough that the factory segment does not tarnish the overall image of the brand.[5]


Most of Coach's closest competitors are either privately owned or owned by larger European conglomerates of various luxury brands. Consequently, comparative data is unavailable. This includes Louis Vuitton and Fendi, both owned by LVMH Moet Hennessy L.V. (LVMUY), and Gucci Group.

Coach's business model is chiefly distinguished by its stress on "accessible luxury." This model thus reaches a larger demographic compared to many of Coach's higher-priced competitors, including Louis Vuitton, Gucci, and Prada. These competitors tend to focus on a higher income, high-fashion demographic. Companies like Dooney & Burke and Cole Haan also stress "accessible luxury" and are Coach's most successful competitors; however, Coach's market share has continued to increase in their presence.


  1. Luxury Spending Sees a Boost
  2. Coach website
  3. http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDE1NzM1fENoaWxkSUQ9NDI3ODU1fFR5cGU9MQ==&t=1
  4. Joseph Chaney. Handbag brand Coach plans major expansion in China..
  5. 5.0 5.1 Coach's Split Personality.
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