P&L

Coach gets boost from “accessible luxury” image in China

April 23, 2013
Obsession
How We Buy
April 23, 2013

Coach quarterly sales

  • The numbers: American luxury accessory maker Coach reported net income of $239 million for the first three months of the year, up from $225 million in the same quarter last year, the company reported today. Revenues at $1.19 billion were 7% higher than the same period a year earlier. Both sales and profits beat analyst expectations.
  • The takeaway: A slower-growing Chinese economy and crackdown on ostentatious spending by government officials hasn’t dented appetites in China for Coach’s leather handbags, wallets and other accessories. Coach’s same-store sales in China rose 40% in the quarter. There were less impressive, but still encouraging signs of consumer spending in North America, where sales increased 1% in the period.
  • What’s interesting: Part of Coach’s success in China is that it is considered an “accessible luxury” for the country’s newly affluent. It has also been targeting men, who make up 55% of China’s luxury market, compared with a global average of 40%. Coach’s better-than-expected sales suggest overall luxury consumption may be healthier than expected. Other luxury makers like Ralph Lauren, Fossil, and PVH report over the next month.

Top News

Powered by WordPress.com VIP