...INTRODUCTION Background in Brief: Coach was first established in 1941, as a small family run leather goods manufacturing business. Over time Coach became recognized as a premium brand that provided superior quality leather goods in classic styles and in the 1980`s it opened exclusive Coach retail stores. Coach was sold to Sara Lee in 1985 and experienced rapid expansion. Coach`s product portfolio was expanded to include, accessories, luggage and briefcases and many more exclusive Coach stores and Boutiques were opened. By the late 1980`s there were 12 exclusive Coach retail stores as well as approximately 50 boutiques selling Coach products within lager department stores. While Coach initially grew it started to lag behind its competitors in terms of trendiness and sales began to decline. In 1996 Krakoff joined Coach and he was instrumental in positioning Coach as an ‘accessible luxury brand`` for it was understood that price was a source of competitive advantage for the brand in the luxury market. In October 2000, Coach went public under the name of Coach Inc. By 2005Coach`s revenues tripled and their share price increased more than 900 % since their IPO in 2000. The Organization Today: Coach is one of the most recognized fine accessories brands in the U.S. and in targeted international markets. Coach is a leading American marketer of fine accessories and gifts for women and men. Their product offerings include women’s and men’s bags, accessories, business cases, footwear...
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...Coach Company Analysis Recommendation: Sell Coach The current recessionary environment has had a strong negative impact on individual income levels, consumer spending and consumer credit availability. As a producer of high priced luxury goods Coach stands to suffer from the state of the economy as conspicuous consumption is frowned upon and consumer frugality is in fashion. These are factors that significantly impact Coach’s financial outlook as the company has experienced declines in both same store sales as well as earnings from fiscal 2008 to fiscal 2009. Coach’s gross margins are also shrinking as the company has had to increasingly rely upon its factory outlet stores to sell its products[1]. This also presents the problem of brand dilution. From a valuation perspective Coach’s P/E ratio, currently at 18.23, is well above the apparel industry average of 3.26, which suggests that from a relative valuation perspective the company may be overpriced[2]. Furthermore, the DCF analysis indicates an intrinsic value of approximately $35.00 while the current share price is $38.27 (3/11/10 close). Based on this quantitative data the stock is currently overpriced and has very little upward potential within our investment horizon. The stock’s price has increased over 200% in the past year and has been fluctuating between $34.00 and $37.00 since October (please see Appendix 1). The alpha from this stock was fully extracted in 2009 and the Coach holdings have run their course...
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...Coach Company Analysis Recommendation: Sell Coach The current recessionary environment has had a strong negative impact on individual income levels, consumer spending and consumer credit availability. As a producer of high priced luxury goods Coach stands to suffer from the state of the economy as conspicuous consumption is frowned upon and consumer frugality is in fashion. These are factors that significantly impact Coach’s financial outlook as the company has experienced declines in both same store sales as well as earnings from fiscal 2008 to fiscal 2009. Coach’s gross margins are also shrinking as the company has had to increasingly rely upon its factory outlet stores to sell its products[1]. This also presents the problem of brand dilution. From a valuation perspective Coach’s P/E ratio, currently at 18.23, is well above the apparel industry average of 3.26, which suggests that from a relative valuation perspective the company may be overpriced[2]. Furthermore, the DCF analysis indicates an intrinsic value of approximately $35.00 while the current share price is $38.27 (3/11/10 close). Based on this quantitative data the stock is currently overpriced and has very little upward potential within our investment horizon. The stock’s price has increased over 200% in the past year and has been fluctuating between $34.00 and $37.00 since October (please see Appendix 1). The alpha from this stock was fully extracted in 2009 and the Coach holdings have run their course...
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...Coach SWOT Analysis Tiffany Smith Columbia Southern University Coach, Inc. is a company that produces and sells luxury accessories for men and women. Coach markets itself as the leading American luxury leather goods company. It specializes in the design and marketing of handbags and accessories worldwide. Its product include handbags, womens and mens accessories, such as money pieces, wristlets, cosmetic cases, key fobs, belts, electronic accessories, wallets, as well as, other leather accessories It is a publicly traded company that began in 1941 as a family owned business. Today, Coach is available in five continents in over 1,000 directly operated stores. Products are also sold at department stores and outlet stores (Coach, 2015). Strengths Coach, Inc. brands itself as the leading luxury leather goods company in the United States. The company began in 1941, so it has over 70 years of designs to use or recreate. Due to the long history, Coach has developed a reputation among for quality products and become one of the most recognized brands in the accessory world. Throughout its history, the company has insisted on quality and value, therefore retaining loyal customers who buy its products. (Coach, 2015). Coach products are available in locations globally including: Directly-owned and operated Coach Retail and Outlet Stores in North America, Asia, and Europe, through Coach website, along with informational websites for over 20 other countries, and Coach stores located...
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...Coach, Inc. About Coach, Inc Coach, Inc in New York, NY is the most recognized luxury American brand manufacturing women’s handbags and purses. It was established as a family-run workshop in 1941 and incorporated in Maryland (Manta). The SIC Code is 3171, and the NAICS Code is 316992. Besides women's handbags and purses, it also produces women's accessories, travel bags, outwear, personal leather goods, apparels, belts, scarves, and men’s business cases, wallets, and purses. In 2010, Coach, Inc. employed approximately 13,000 people and had an estimated annual revenue of $3,230,468,000 (Coach, Inc. 10K, 2010). Although Coach does have men’s handbags and so many products, it mostly concentrates on women’s handbags and purses. Another marketing strategy is that Coach focus on women, not teenager girls. The luxury brand tends to market to high income, professional females. The older females also show higher brand loyalty. International market Coach has 463 stores in the United States and Canada, 161 stores in Japan, and 41 stores in China. Coach also has stores in over 20 countries including South Korea, Taiwan, Singapore, Malaysia, Indonesia, India, Thailand, Vietnam, Mexico, Bahamas, Saudi Arabia, UAE, Bahrain, Greece, France, Russia, New Zealand and Australia. As of 2010, Coach’s total net sales were $3,607,636,000. Net sales in Japan were $720,860,000, which was approximately 20% of the total net sales. In the other international market, the net sales were $352,404...
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...Coach | By: Cynthia Cordon | A brief introduction to Coach Company and its financial statements. | 12/17/2014 12/17/2014 Table of Contents Cover Page………… ……………………………………………………………..……………… Coach Symbol…… ……………………………………………………………………………….1 Table of Contents………………………………………………………………………………….2 Introduction to Coach……………………………………………………………………………..3 Coach Financial Statements……………………………………………………………………….4 Summary……………………………………………………………………………..……………5 References…………………………………………………………………………………………7 Coach Coach was originally founded in 1941 as a family-run workshop in Manhattan, New York. It started with six artisans handcrafting a collection of leather goods using their skills that were handed down from their generations. Later, the consumers of the company began to seek out that quality that the Coach craftsmen had. Coach is now expanded, and it continues to maintain the highest standards for materials and workmanship. As of June 2014, there are over 500 Coach Stores in North America, 450 in Asia, and over 25 in Europe. Coach Company also operates in e-commerce websites all over the United States, Canada, Japan, and China. They provide informational websites in over 20 other countries. Coach has built a strong presence globally through Coach Boutiques located in several department stores and in specialty retailer locations in North America and Europe. Coach Company stores are also are located as well as through distributor-operated shops in Asia, Latin America...
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...Case Study 4 Coach, Inc Ms. Nicola Hudson Company Overview Coach Inc. is an American designer of handbags, leather goods, outerwear, travel goods and accessories for men and women. Coach has been in existence for 64 years maintaining the strongest brand in affordable luxury. Coach primarily operates in the United States, Japan, and East Asia. There are approximately 190 Coach stores in the United States. Of these stores 120 are retail and the rest include factory outlets, catalogs, and an online store. Outside of the United States 175 Coach stores are spread in18 countries. Coach was founded in 1941 as a family workshop with six workers who made small leather goods by hand. One of the workers included Miles Cahn who began running the workshop for its owners in the 1950s. Ten years later Cahn borrowed money to buyout the company’s owners and take possession of Coach Inc. It is under the Cahns’ possession where Coach took more of a conservative, high quality and elegant feel to the leather products as opposed to following trends. But as fashion changed greatly so did Coach’s traditional style, introducing products for specific seasons and trendier styled clothing. By the late 80s the company began a mail order business and specialty stores to help sell its products outside of department stores. During this time Coach also began expanding internationally. The company opened...
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...Running head: MARKETING STRATEGY – COACH, INC. (COH) Marketing Strategy Coach, Inc. (COH) Shirl L. Jenkins Professor: Eddie Alford Principles of Marketing (MKT100 - 014016) August 24, 2008 Introduction Coach is a leading American marketer of fine accessories and gifts for men and women. Their product offerings include handbags, women’s and men’s accessories, footwear, outerwear, business cases, sun wear, watches, travel bags, jewelry and fragrance. Coach has been in existence for sixty-four (64) years maintaining the strongest brand in affordable luxury accessories. Coach operates in two segments: Direct-to-Consumer and Indirect. The Direct-to-Consumer segment includes sales to consumers through Company-operated stores in North America and Japan, the Internet and Coach Catalogs. The Indirect segment includes sales to wholesale customers in the U.S. and Asia. Coach’s business model is based on multi-channel international distribution; therefore their success does not depend solely on the performance of a single channel or geographic area. Founded in 1941, Coach has grown from a family-run workshop in a Manhattan loft to premier accessories marketer in the United States. Coach developed its initial expertise in the small-scale production of classic, high-quality leather goods constructed from “glove-tanned” leather with close attention to detail. By the 1980s, Coach had entered into it first mover strategy by growing into a niche maker and marketer of traditionally...
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...| | | | Founded in 1941, Coach is a US based producer and retailer of leather goods, handbags, shoes, luggage, and accessories for women and men. With its classic American styling, Coach has become one of the most recognized accessory brands in the United States. Coach is a publicly traded company listed on the New York Stock Exchange as COH. Competitive Set Coach competes with a number of luxury accessory brands. According to Hoovers.com, three of its closest competitors are: * Dooney & Bourke, Inc. * Seller of accessibly priced luxury handbags and accessories for women and men. Distributed through department stores, online sales, and print catalog sales. The company operates a small number of boutiques in the US and has a small number of international boutiques, including a single boutique in Tokyo and a single boutique in Macau. * kate spade LLC * Seller of handbags, diaper bags, stationary, clothing, shoes, jewelry, and various other accessories for women and men. The company distributes its wares via 65 kate spade boutiques in the US, and in upscale department stores. Kate spade products are also distributed throughout Asia in department stores. * Michael Kors (USA), Inc. * Seller of high end clothing, shoes, handbags, jewelry and accessories. Products are sold through upscale department stores and through Michael Kors boutiques. Michael Kors boutiques are located throughout the US, Asia (but none in China, so far)...
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...Section I – Organizational History Coach, Inc began in 1941 as a small leather goods workshop in Manhattan, NY. Family members handcrafted the goods from skills handed down to them from many generations and consumers quickly looked to Coach for the unique nature and quality of their goods. Headquarters is still located in Manhattan in their former factory lofts. From here they have succeeded over the years by expanding into various product categories while maintaining the classic American style that Coach has become famous for. Coach is available in over 900 department stores in the US, 182 international department stores, retail store and duty free shop locations in over 20 countries, 161 department store shop-in-shops and retail and factory store locations operated by Coach Japan, Inc. To add to their global vision, the company has taken China by storm and sees the potential to add as many stores in China as they have at home in the US. Coach has weathered the economic crisis well over the last couple years concentrating on international growth and innovative distribution strategies. Their vision remains the same; to be the leading brand of quality lifestyle accessories offering classic, modern American styling. Section II – Strengths and Weaknesses I would consider two strengths of Coach’s to be the design, quality and diversification of their product and their distribution strategies. Two of Coach’s current weaknesses are the difficulty of contingency planning...
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...Table of Contents Executive Summary 3 Industry Success 3 Coach Strategy 3 Company and Industry Overview 4 Company Overview 4 Industry Overview 5 Apparel and Accessories Industry 5 Luxury Products Industry 5 Michael Porter’s five forces model 8 Competitive Force 1: Rivalry among Competing Sellers (Moderate) 9 Competitive Force 2: Threat of New Entrants (Low-Moderate) 9 Competitive Force 3: Threat of Substitute Products (Moderate-High) 10 Competitive Force 4: Bargaining Power of Suppliers (Low) 10 Competitive Force 5: Bargaining Power of Buyers (Low) 11 Industry Driving Forces 11 Increasing Globalization 12 Marketing Innovation 12 Changing Societal Concerns, Attitudes, and Lifestyles 13 Key success factors 13 Cost 13 Quality 14 Brand Image 14 Competitive strategy analysis 14 Vertical Integration 15 Transaction Cost Economics 15 Cooperative Strategies 16 Offensive Strategies 16 Defensive Strategies 17 First Mover Advantages 17 Financial Effects 17 SWOT Analysis 18 Strengths 19 Good Position – Strong Brand Image of “Affordable Luxury” 19 Excellent Customer Service 19 Strong Performance despite Weak Economy 19 Comprehensive Distribution Channels 19 Strong Financial Position 20 Weakness 20 Geographic Concentration 20 Dependence on Independent Manufacturers for Procuring Merchandise 20 Declining Operating Margins 20 Opportunities 20 Expanding Market 20 Joint-venture 21 Gaining Higher Revenue by Increasing Online Sales 21 Threats 21 Counterfeit...
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...Is Coach, Inc. The Next Investment? Table of Contents Section Page Number Executive Summary 3 Introduction 4 Background 4-5 Financial Analysis Results 5-6 Discussion of Results 7-14 Conclusions and Recommendations 14-15 References 16 Executive Summary This paper presents a recommendation to an investor as to whether or not he / she should invest in Coach, Inc. (Coach), a publicly traded company on the New York Stock Exchange (COH). Coach is a retail company specializing in luxury goods and accessories for both women and men. Although Coach has been a major player in the leather handbag industry for several years, it’s most recent shortfall against expectations could serve as an indicator of competitors gaining considerable market share and potentially introducing undesirable risk to an investor. The analysis in this paper will provide investment guidance by evaluating Coach’s financials statements and financial performance against its competition and industry. It will express how Coach’s most recent annual report in comparison to prior performance signifies investors should hold off from moving on Coach’s stock in the near future. Should You Invest in Coach? Introduction As an aficionada of women’s luxury accessories, I found myself turning to some more affordable luxury brands such as Coach in my early 20s. More than a decade later, I am still a major fan and consumer...
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...Faculty of Business, Environment and Society Assignment Brief Module Title: Managing Business Assignment Number One Module Code: 244SAM Assignment Title Coach Inc. Submission Date: 29/01/2016 (FT) 03/02/2016 (PT) Module Leader Jasper Tham Module Team N/A Submission Submission through Time and Place: Turnitin no later than 23:55 on the above date. Module learning outcomes being assessed LO1. Explain and assess the nature of the changing business environments. LO2. Propose, evaluate and communicate strategic options available to an organisation. Assignment Information This individual assignment requires you to write a 2500 word original assignment answering the following question/s: Task Consider the case of Coach Inc. in regards to its business strategy in the luxury goods market. Coach Inc. case is a popularity brand among young adult women. Industry statistics presented in the case indicated that young professionals are among the most frequent purchasers of “accessible luxury” goods such as Coach handbags. The case contains ample information for conducting an industry analysis and company situation analysis. You will be able to conduct an industry analysis (dominant economic characteristics, driving forces, five competitive forces and key success factors) and use the tools for company situation analysis (assessment of how well Coach’s strategy is working and SWOT analysis). The information in the case...
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...The Wall Street Journal Weekly Review Coach Leans Heavily on Outlet Stores 'Over-Democratization' Potentially Jeopardizes Brand's Image As upscale brands seek to enter or expand their outlet businesses and even produce merchandise specifically for that channel, they face an age-old dilemma: sales growth vs. brand exclusivity. At Coach Inc., COH -1.07%its North American outlet business has grown to 60% of its retail sales in the region from about 30% in fiscal 2006, according to Cowen & Co. analyst Faye Landes. The number of items sold at its outlets has jumped to 73% of its North American retail business from an estimated 38% during the same period, Ms. Landes said. (Wall Street estimates that Coach's North America retail sales account for about two-thirds of its overall sales.) Coach's outlet business in North America is 60% of its retail sales The outlet channel also has become more productive for Coach, generating over $2,000 per square foot, compared with less than $1,400 per square foot at its full-price locations, a reversal from fiscal 2006, she said. "Consumers may increasingly perceive Coach as an off-price brand, which, if valid, could challenge [Coach's] efforts to elevate and transform the brand," Ms. Landes said in a report this week, adding that while most of the retailer's outlet products are made for that channel, they are still easily identifiable as Coach. "Our findings raise a concern of possible over-democratization of the brand which may...
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................................................................................. 11 Short-Term Recommendations ....................................................................................12 Long-Term Recommendations.....................................................................................13 Conclusion ...................................................................................................................14 Bibliography ................................................................................................................16 2 Executive Summary Company Overview Coach, Inc. is a preeminent US-based leather goods and accessories company providing diversified merchandize comprising handbags, wallets, men’s and women’s accessories, outerwear, scarves, fragrance, just to name a few. The firm was founded in 1941, and it was in 2000 that Coach became a publicly traded company listed on New York Stock Exchange. As of...
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