Coach Wants To Close The 1/4 Store In The US Department Store.

U.S.A

Its sales figures for the fourth quarter and the whole fiscal year were released on Tuesday, thanks to more efficient adjustment of distribution stores and its flag.

Brand Stuart Weitzman grew strongly, and corporate profits exceeded analysts' expectations in the fourth quarter.

Coach department stores in the United States continued to decline in sales and promotional activities were frequent. The company said it was preparing to close its 1/4 stores in US Department stores.

In the latest quarterly earnings report up to July 2nd this year, sales of Coach Direct stores in the United States increased by only 2%, but sales in department stores fell sharply in two figures. Under the influence of this measure, Coach expects 2017 revenue will have some negative effects. Investors are also beginning to worry about the growth momentum of Coach. Coach shares fell more than 2% at the closing date of the earnings announcement.

Coach expects revenue growth in the 2017 fiscal year to be in the low median digits. FactSet analysts forecast that the company's revenue in fiscal 2017 was $4 billion 680 million, an increase of 4.1% over the same period last year.

In the fourth quarter, Coach revenue increased from $1 billion in the same period last year to $1 billion 150 million, slightly below the average FactSet analyst's estimated $1 billion 160 million.

The company recorded a profit of 81 million 500 thousand US dollars, which is higher than that of FactSet analysts. The profit in the same period last year was US $11 million 700 thousand.

By Region

Sales in North America increased by 9% over the same period last year, accounting for 606 million US dollars, higher than the average FactSet analyst's estimated $591 million 800 thousand, while the same store sales in the US increased by 2%, exceeding the 1.8% growth expected by the market.

Coach sales in the international market other than the United States increased by 15% to 450 million dollars, of which mainland China's sales revenue increased by 5%, which was offset by the weak performance of Hongkong's Macao market.

Sales in Japan increased by 7% and business in Europe increased by two digits.

Early last year, Coach $574 million acquisition of shoe brand Stuart Weitzman is showing market potential. In the fourth quarter, the brand sales volume was $84 million, higher than the FactSet forecast of $81 million 600 thousand.

Earlier, the company said that after its acquisition of Stuart Weitzman, it had a multi brand operating capacity, expanding product categories and further improving its overall market share.

In the middle of last month, Coach appointed luxury brand Valentino, former US CEO Wendy Kahn as the CEO and brand president of Stuart Weitzman, and the former CEO Wayne Kulkin retired as second tier brand consultant.

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 the use of discounts to retain customers.

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

Now, Coach is working hard to restore its full sales.

According to internal sources, the company is planning to grab more market share from its main competitors such as Michael Kors and Kate Spade.

From the second quarter, Coach began to go out of the trough. After 10 consecutive quarters of declining revenue, it began to record 4.5% growth beyond Wall Street's expectations. The strategic plan and the current good performance of the brand revival are in line with the industry's expectations. According to an analysis report by Corinna Freedman, an analyst of BB&T company, the negative trend of Coach company is no longer deteriorating, the loss of market share has bottomed out, and the business condition is improving.

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.

Christian Buss, an analyst at Credit Suisse Group, pointed out earlier 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.

At present, sales of Coach 60% come from discount stores, which is also the problem of Coach.