Coach’s sales have been down $200 million since 2014 as it lost market share in a shaky and weakened handbag category. Its sales at department stores saw a 2 percent drop in the category last year due in part to consumer preference for smaller, less costly bags and purses.
However, Coach’s shares rose 10 percent recently after the struggling handbag maker reported its first sales increase in more than two years. The gain is largely due to its acquisition of the Stuart Weitzman brand in May 2015
“Coach seems to be achieving the nearly unattainable in retail: giving a brand that was cheapened by years of discounts its luster back,” reports Fortune.
Coach has rallied, expanding into higher-price offerings such as its luxury 1941 label and is pushing into higher-end stores like Nordstrom and Saks Fifth Avenue. In addition, the brand’s redesigned stores represent 40 percent of its locations and continue to outperform older ones.
— Coach, Inc. (@Coach) February 2, 2016
Coach recently reported net sales rose 7% to $1.27 billion in its second fiscal quarter ended Dec. 26, buoyed by growth in China and its men’s lines.
Since peaking in 2012, the New York leather goods brand “came to be seen as a brand for masses attracted to gaudy handbags, rather than the maker of quality, elegant leather goods with history going back to 1941,” according to Fortune.
Under CEO Victor Luis, the company reduced mega promotions and flash sales, moved off logo-saturated merchandise and hired designer Stuart Vevers to design higher-end presentations at flagship stores.
— Vogue.fr (@VogueParis) January 29, 2016
As of last year, Coach had more than 450 stores in North America, approximately 500 directly operated locations in Asia and over 30 in Europe. Coach also operates e-commerce websites in the US, Canada, Japan and China, and has boutiques, specialty retailers and distributor operated shops worldwide.
Its global footprint is expanding to India in a partnership with Genesis Luxury Fashion Pvt Ltd, timed to coincide with its 75th anniversary this year. “Coach has tremendous potential in our market, and with our shared vision and well-defined strategies, we are focused on accelerating the retail presence and brand visibility in India across key metros in the next few years,” said Sanjay Kapoor, Managing Director, Genesis Luxury, in a press release.
While it’s still too early to be certain, “there is reason to hope that a brand can go back upscale after going the discount route after all,” adds Fortune.
— Coach, Inc. (@Coach) January 28, 2016