Coach sales in N. America plummet as it loses more ground to rivals
By Phil Wahba
(Reuters) - Coach Inc's (COH.N: Quote) sales in North America during the key holiday quarter fell more than the handbag maker had forecast as new rivals continued to eat away at its market lead and fewer shoppers came into its stores.
The New York company, known for its Poppy handbags, on Wednesday reported a 13.6 percent drop in comparable-store sales in North America, the third straight quarter of decline in a market that accounts for 70 percent of its revenue.
Shares were down 7.7 percent at the open at $48.50.
Coach has been losing market share in recent years in the U.S. handbag market to fast-growing rivals such as Michael Kors Holdings Ltd (KORS.N: Quote), kate spade FNP.N and Tory Burch.
But it has also had to deal with major changes in its top management ranks, including a new chief executive and creative director.
The company is trying to offer more footwear and fashion to become a lifestyle brand, but products designed under the supervision of the new creative director, Stuart Vevers, will not be in stores for a few months, leaving Coach with stale merchandise, Edward Jones analyst Brian Yarbrough said.
"These guys are definitely losing share. Fashionwise, they're missing the beat," Yarbrough said. Despite strong growth in China, where sales rose 25 percent during the quarter, Coach must fix its business at home, he said.
"North America is their bread and butter. They have to get that going." Continued...