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 — Shares of handbag makers Coach Inc. and Michael Kors Holdings Ltd. took a hit on Monday after analysts warned that slumping sales will probably continue.
JPMorgan Chase & Co. downgraded Coach to a neutral rating from the equivalent of a buy, saying the brand's overhaul hasn't yet resonated with shoppers. Piper Jaffray Cos., meanwhile, lowered its earnings estimates and price target on Kors, citing a buildup of inventory at chains like Macy's Inc. and Dillard's Inc.
The strong dollar has kept tourists from buying as much Kors merchandise in the U.S. — a situation that will probably get worse before it gets better, JPMorgan said in its report. Sales of wristwatches also are sluggish, Piper Jaffray found.
“Watches remain under pressure in the U.S. and are starting to slow in Europe,” Erinn Murphy, a Piper Jaffray analyst, said in her report.
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Coach fell as much as 4 percent to $29.95 in New York, the biggest intraday decline since May 27. The stock was already down 17 percent this year through the end of last week. Kors tumbled 7.3 percent to $38.92, which was also the worst performance since May 27. The shares have now lost almost half their value this year.
By Nick Turner; editor: Kevin Orland.
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