Slate’s The Big Money reports on how the purse company stays alive by offering cheaper bags:
Coach operates with exceptional savvy in the fast-changing, embattled fashion industry. Like scheming social climbers the world over, Coach, which regularly sheds its skin in the form of updates and upgrades, is the envy of struggling brands. Consistently ranked among the most competitive retailers, Coach boasted $3.2 billion in revenue for 2008. Last quarter, the cash-rich company reported net sales totaling $740 million, compared with $745 million a year ago, a decline of about 1 percent—and an earnings drop of 29.3 percent—during the most challenging retail environment in decades. Direct-to-consumer sales, mostly through Coach’s 400-plus retail and outlet stores, rose 9 percent last quarter to $634 million, while same-store North American sales declined 4 percent, largely due to the company’s decision to control distribution more tightly. In Japan, Coach holds a 14 percent share of the imported accessories market, second only to Louis Vuitton, and it recently hired a new Coach China president. – from the Big Money