NEW YORK, United States — Affordable luxury leather goods giant Coach implemented significant redundancies yesterday, eliminating more than 150 jobs. The New York-based company confirmed the job losses in an email statement provided to BoF.
“During our analyst and investor conference in June we unveiled a comprehensive long-term strategic plan to reinvigorate our business. To that end, we’ve announced certain restructuring actions to align our resources for maximum impact while effectively managing our expense ratio. These include a reduction in corporate staffing levels globally, with the elimination of over 150 jobs.”
Coach has faced strong competition in the affordable luxury space due to the rise of ascendant lifestyle brands like Michael Kors, Kate Spade and Tory Burch. Having once defined and dominated the sector, the brand's like-for-like sales have dropped over the last four quarters and are expected to fall in the “low double digits in percentage terms” in the year ending June 2015.
Despite the brand's continued popularity in China, North America, from which it receives about 70 percent of its overall revenue, has proved a challenging market in the last few quarters. Revenue from North American same-store sales is expected to fall as much as the “the high teens in percentage terms," the company said previously on 19th June, when it also announced the closure of 70 North American stores.
“This plan will drive efficiencies across our business by streamlining our organisation and leveraging our global capabilities, resulting in savings that will, in part, fund key initiatives related to our transformation.”
Coach is actively seeking to transform itself into a lifestyle brand. In June 2013, Stuart Vevers, previously of Loewe and Mulberry, was announced as the new executive creative director, replacing Reed Krakoff, who had been at the brand's creative helm for 16 years. Vevers oversees design of leather goods and ready-to-wear, and this season, brought in celebrated photographer Steven Meisel, an Italian Vogue and Prada stalwart, and leading art director Fabien Baron to create Coach’s Autumn-Winter 2015 campaign.
To date, Vevers’ ready-to-wear collections have been well received by press, but it is too soon to gauge the reaction from consumers. The products designed under his purview will not be available in stores until September.