The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — Coach Inc. fell as much as 8.2 percent in early trading after North American sales plunged last quarter, a sign its comeback plan isn't yet gaining traction.
The region’s same-store sales, a measure that tracks established locations and Internet orders, fell 23 percent in the fiscal third quarter, which ended March 28. Analysts predicted a drop of 21.5 percent, according to Consensus Metrix.
The results show that Coach still has a long road ahead to restoring its cachet with consumers. The handbag maker has been remodeling stores and teaming up with fresh designers, aiming to reverse its sales declines and win back market share from competitors like Michael Kors Holdings Ltd. So far, that hasn't brought a resurgence in orders. Currency effects also took a toll last quarter, reducing the value of its overseas revenue.
"We continue to be focused on the execution of our strategy, elevating Coach's perception in the mind of our consumers and reinvesting in the brand," Chief Executive Officer Victor Luis said in the statement.
ADVERTISEMENT
Coach fell as low as $38.85 in early trading in New York. The stock has gained 13 percent this year through the close of trading on Monday, bolstered by optimism about the company’s turnaround. That compared with a 2.4 percent increase for the Standard & Poor’s 500 Index.
Total revenue tumbled 15 percent to $929.3 million last quarter, the New York-based company said, missing the $950.6 million estimate.
As part of an effort to become a lifestyle brand, Coach agreed to buy designer footwear company Stuart Weitzman in January for as much as $574 million. The deal, which is expected to add to earnings immediately after it's completed, is slated to close in May. Stuart Weitzman had about $300 million in sales in the year ended September 30.
By Lindsey Rupp; editor: Nick Turner.
In 2020, like many companies, the $50 billion yoga apparel brand created a new department to improve internal diversity and inclusion, and to create a more equitable playing field for minorities. In interviews with BoF, 14 current and former employees said things only got worse.
For fashion’s private market investors, deal-making may provide less-than-ideal returns and raise questions about the long-term value creation opportunities across parts of the fashion industry, reports The State of Fashion 2024.
A blockbuster public listing should clear the way for other brands to try their luck. That, plus LVMH results and what else to watch for in the coming week.
L Catterton, the private-equity firm with close ties to LVMH and Bernard Arnault that’s preparing to take Birkenstock public, has become an investment giant in the consumer-goods space, with stakes in companies selling everything from fashion to pet food to tacos.