Boston, MA 01/23/2014 (wallstreetpr) – Coach, Inc. (NYSE:COH) witnessed its steepest downfall in three months after the largest U.S. luxury handbag maker’s sales during the holiday shopping season in its stores in North America declined by twice more than what analysts had estimated.
Unfavorable conditions
In October last year, the retailer had reported a quarterly gain and revenue that followed projected analysts expectations. Since then the company’s shares fell by 6% down to $49.38 at the close in New York. The unfavorable results were on account of the competition in the handbag segment which accelerated pace in the holiday season. Many of the U.S. retailers were seen to resort to profit hurting promotions to attract footfall of the customers most of which seemed unwilling to spend. Sales at the stores in North America open for more than a year’s time dropped by 14% in the fiscal second quarter. Shopping malls were noticed with ever decreasing random shoppers.
According to an analyst at Wedbush Securities in New York, the comparable sales could not reach the mark expected. He pointed out the low traffic as one of the major reasons for such results. Another probable cause, he said, was the harsh weather. Some analysts had estimated a 6.8% average decline, as reported in a research by Retail Metrics.
Entry into the New York fashion week
Coach had earlier in November given a notice that its customers were targeting a 4% cut in the expenditure during the busy year end season. The company’s Chief Executive Officer, Victor Luis is now concentrating on the New York fashion week for the first time. It is scheduled to be held in February where the handbag maker will for the first time host presentations for its new fall season collection. Luis, who had taken over his position earlier in the month, is aiming to convert Coach into a lifestyle brand. He has restructured the design team and has introduced fashion outwears and shoes along with other accessories apart from new bags.
