Coach X Disney Sales Performance Is Gratifying, Peer Competition And Eye-Catching.

In the face of the depressed fashion retail environment, the us light luxury brand Coach CEO Victor Luis is implementing a strategy to make the brand more avant-garde and younger.

Recently, the brand has launched a series of leather products with Disney, including limited handbags of Disney's classic cartoon characters.

In addition, the strategy has aroused the concern of the industry: Coach is vigorously correcting the declining brand image of long term discount sales, and tries to sell products at full price.

It has been revealed that after the CoachxDisney series was launched in June 17th, sales performance was very eye-catching. Many handbags were soon sold out on the online mall, including a Mickey Mouse Kiss Lock designed for a $395 bag and Mickey Mouse Doll handbag priced at $1500.

With this successful cooperation, CEO Victor Luis is confident to the media that Coach will continue to carry out similar cooperation.

Some people commented that it is difficult to conclude whether the CoachxDisney series and the new series can save Coach. Although the new products designed by Stuart Vevers are very novel and avant-garde, they are less attractive to domestic consumers than foreign tourists. In the US market, the strong US dollar makes the sales of products more difficult.

Christian Buss, an analyst at Credit Suisse Group, points out that the biggest problem for Coach is that it relies too much on handbag business. Handbag business occupies 80% of total sales, but the product category is still in recession stage in the industry.

Credit Suisse Group is very worried that the growth of Coach handbag sales in North America is slowing down, because if handbag sales do not increase, it will represent a more challenging situation for Coach. At present, the sales of Coach 60% come from discount stores, which is the problem of Coach.

UBS analyst

The sale of limited edition products ensures that Coach will no longer be obsessed with the strategy of discount sales, and that limited products have higher scarcity value, which can stimulate consumers' consumption desire more than coupons and other promotional activities.

The decline in consumer demand and excessive discount activities have led to a decline in sales revenue of Coach in the past two consecutive years. Coach is now trying to regain its reputation in the industry. Its launch of a series of new products designed by creative director Stuart Vevers aims to win market share from competitors Kate Spade and Michael Kors.

Some industry analysts say that the luxury giants, including Michael Kors and Coach, are correcting the wrong business models. They have made a classic mistake, that is, using brand reputation to fall into many common traps of fast developing retail brands, including rapid business expansion, large number of shops and utilization.

Keep customers.

The ultimate negative effect is that consumers will never pay for the standard handbags.

Now, Coach is aware of the problem.

The strategic plan and the current good performance are in line with the expectations of the industry, and also enhance the confidence of the fashion retail targets.

Reducing the number of blind, endless promotions is the first step in its recovery.

According to the company, Stuart Vevers's newly opened Coach 1941 line is mainly aimed at saving the company's past glory. It can help Coach increase specialized stores and attract more retailers, and also help brands reduce exposure in some low-end shopping malls.

Victor Luis said that Coach will use American pop culture to promote its brand to attract more overseas consumers and foreign tourists. This year, the company set up 75th anniversary. The company plans to open a new flagship store in Fifth Avenue. The company believes that global market opportunities still have potential, and the demand of global consumers is still unsatisfied.

Coach said that the company has started to go out of its trough from the 2016 second quarter, and has recorded 4.5% growth after the 10 consecutive quarters of declining revenue, exceeding Wall Street's expectations. The third quarter continued to grow, with a net sales of 1 billion 30 million US dollars, up 11% from the 929 million US dollars in the same period last year.

Earlier, according to an analysis report by Corinna Freedman, an analyst of BB&T company, the negative trend of Coach company is no longer deteriorating, and its business condition is improving.

In the past 6 months, the stock price of COH has risen by more than 24%.

However, in order to achieve its target operating profit margin of 20% in fiscal year 2017, the company announced that it will lay off 2 executives and 300 ordinary employees at the end of April.