Coach Sales and Profits Increase by 2% in Q4

Coach, Inc. released its fourth quarter fiscal 2016 results and sales and profits have increased by 2% as the brand plans to get its bags out of department stores.

According to an article in Fashionista, Coach, Inc. released its Q4 fiscal 2016 results on Tuesday and the brand’s sales and profits have increased by 2%. Overall net sales increased by 15% in Q4 and 7% for the year.

The Coach brand specifically had sales increase by 11% in Q4 and flat sales for the year with the benefit of an extra week of sales in fiscal 2016. This, just a year after Coach reported a 19% decline in sales.

Coach, Inc. has been trying to get the companies profits back up after a couple of years of declining sales and profits. The company has hired a new creative director, renovated stores, launched luxury ready to wear brand Coach 1941, and the brand is now planning to improve its retail strategy.


The brand is planning to include its more expensive Coach 1941 handbags in all stores, move from 12 to 8 deliveries a year to keep successful bags in stores longer, improve its wholesale business, and “better align with the fashion calendar”, says Coach CEO Victor Luis.

What’s more, the brand is planning to lower the amount of bags sold in overly promotional department stores. Luis says the brand will lower its department store count by 25% and lower “markdown allowances”. The brand will instead increase the amount of bags sold in luxury stores or stores the brands views as a “retail and marketing investment”.

Luis also mentioned the brand would be more selective about who it worked with at the Financial Times Business of Luxury Conference earlier this year saying,

Irrespective of what we hear about the demise of the department store, it’s true that consumers do go to specialty stores and department stores to be educated on brands and so it’s very important for us to continue to partner — yes, in a selective way — with those players.

The brand is also planning to launch a new line of fragrances with Interparfums in the “coming months” as well as plans for Stuart Wietzman, a shoe brand Coach Inc. bought earlier this year.

As was reported, Wietzman himself resigned as the creative director of the brand on Tuesday and was replaced by Giovanni Morelli, who was a designer of all non-apparel categories at Loewe.

Luis plans to make the luxury shoe brand a “multi-category” brand that also sales handbags and other accessories.

Given all of the Luis’ plans, the brand will probably have sales and profits increase more next year.

So, what do you think? Will Coach’s sales and profits increase? Let me know in the comments below. Also, don’t forget to subscribe to get new posts sent directly to your inbox and follow me on Facebook, Instagram, and Snapchat.

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