Coach to expand into different product categories to counter weak sales
After unveiling weak holiday-quarter results, American premium leatherwear brand Coach has unveiled a new strategy for shoes and clothing. Reuters reports that in order to boost drooping sales in North America, its biggest market by far, Coach is seeking to become a “head-to-toe” lifestyle brand by moving further into segments where it is a minor player, including shoes and clothing.
North American sales were down by 2 per cent and as a result, shares fell by 15.8 per cent slashing the company’s market value by nearly $US2.7 billion. In a bid to diversify away from handbags, Coach said it will “re-launch” its shoe section at 170 of its 356 stores in March, and has begun to install shoe “salons” to better showcase its footwear at a few flagship stores.
One of Coach’s biggest issues is the emergence of similarly-priced brands like Michael Kors and Tory Burch. Those companies have exploded in recent years, and Coach now has to compete for the same customers. Meanwhile the competition has already dominated other categories. Michael Kors watches were one of the hottest holiday items, while Tory Burch’s ballet flats are said to be the basis for her fashion empire.