Three years ago, the American Frank Frank (Lew Frankfort) standing up to 492 meters of Shanghai World Financial Center floor, the most favorite thing is to look at the Huangpu River. The ups and downs of the buildings on both sides of the river are so frequent that they often produce illusions in New York, which he sees as the gospel of Coach in China. But now, he or his successor are afraid that there will not be such a smug mood.
In the past year or so, Coach is going through a bad time. In the near term, Coach reported its first-quarter results for fiscal year 2015: US continued weakness led to overall sales fell 19% year-on-year and global sales rose only 4%. Since the beginning of the year, Coach’s share price has fallen by nearly 40%.
Coach has been in a very long period of time to maintain the brand to make money machine high-speed operation; its hundreds of stores in the world, almost alone swept the whole “price close to the people of luxury goods” market. But in the past three years, strong rivals such as Michael Kors and Kate Spade have entered the market, leading to Coach’s sales in North America plummeted, threatening its “king of light” status.
In fact, Frankford has experienced numerous business crises in the past 33 years. The most typical is twice: one is “sold” Coach; the second is “defeated” in Europe. In the mid-90s of the last century, Coach was demoted by the fashion industry as “mother’s handbag”, the crisis of survival prompted Frankfurt to change, he made two things: First, the introduction of handbag design of young and fashionable, and in Madison Avenue opened the first store; the second is to persuade the founder, the brand sold to department store giant Sara Lee, and select Sara Lee on the one hand to get development funds, on the one hand can not interfere in Sara Lee’s brand management Under the authorization, keep the brand independent and free. These two strokes, and later became Coach salted fish stand home of the home.
As for the European market, Frank Fuching Coach in order to foothold in the world luxury camp, you must knock on the walls of Europe. American brands want to have a luxury in the European right to speak is not easy. Coach in Europe only took 10 years to declare their own failure. However, Coach’s heart has never changed.
Returning to the United States, Frankford once again innovated the definition of luxury brands, the first rise to the consumer demand-oriented business on the real. In 2000, Coach from Sara Lee and the successful listing, and formally put forward the “luxury at your fingertips” concept. By the end of 2006, the company’s market value has been close to 18 billion US dollars, becoming the leader in fashion brands. After the success of Coach in the home beyond the LV, its annual sales grew to more than 3 billion US dollars, and become the world’s largest handbags and leather goods brand. Even after the financial crisis in the market downturn in 2009, Frankfort is still with a beautiful performance of the return of investors.
As for the Chinese market, Frank Foley is an important deployment of changing the global performance contribution structure. In April 2009, Frankford repurchased the mainland business from Hong Kong agent Junsi Group, paving the way for his own independent operations. In 2011, Coach chose to be listed on the Hong Kong Stock Exchange to become the first US registered company listed in Hong Kong. Over the next few years, China has become Coach’s fastest growing market in the world.
But the crisis behind the high growth has long emerged, Coach’s sales in the first three years of 14 years occurred diving, analysts pointed out that Coach’s plate is too large, and everywhere the store began to corrupt it as a high-end brand The halo. After the news warning Coach as of the end of June the end of June fiscal year revenue will be double-digit decline in the year, and a number of institutions also lowered the rating of the stock.
Senior consumer industry that COACH is his own outlaws hit the brand. Has been cited by COACH’s huge Outlets store due to price differentiation, even the factory goods also led to the consumer on the price of goods is a great diversion. And for more and more opportunities to the Chinese Chinese consumers, the same is true. On the other hand, more and more light luxury goods on the emergence of the impact of COACH, if not from the product and brand positioning changes to start, COACH difficult in this market continue to maintain the advantage.
Coach once again had to start a planned transition plan for many years, including 70 stores in North America to complete the business, reorganize the global network of shops and enhance the luxury style, in prime locations to open stores and organize inventory. And the huge acquisition of mid-range luxury footwear manufacturer Stuart Weitzman is an important move. Coach has been in the past 10 years, the definition of “price close to the people of luxury”, and now try to define the “modern luxury.”
The same time as the above-
In early May, Coach’s acquisition of Stuart Weitzman was completed. Concerned at the beginning of this year, Coach spent $ 530 million from the private company Sycamore Partners bought the US high-end women’s shoes brand, HBSC analysts believe that the 2016 fiscal year Coach sales will be 1% Rise, but if you count the new acquisition of this fashion brand, then the group level growth can reach 10%.
And will be opened in Paris this fall, flagship store, both as Coach its all-round “luxury” an important step, but also its original proof of the same.
This year is the 75th year of the birth of the New York brand. In any case, everything is worth looking forward to.