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Limiting promotions limits Coach’s online sales

January 31, 2017 03:40 PM
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Limiting the number of products it discounts hindered online sales during the second quarter of fiscal 2017 for luxury handbag maker Coach Inc.

Coach, No. 163 in the Internet Retailer 2016 Top 500 Guide, does not break out online sales in its quarterly earnings reports. North American direct sales, which include the company’s 425 stores in the region as well as its online store, were up 5% year-over-year during the quarter. However, Andre Cohen, the retailer’s president of North America, told analysts on Coach’s fiscal second quarter 2017 earnings call that e-commerce negatively impacted sales during the quarter because “we have a clear strategic direction to limit our promotional stance online given the negative impact on long term brand health.”

Meanwhile, Coach became the second luxury brand this week to create a new position on its team for a Starwood Hotels & Resorts veteran when it hired Carlos Becil as its chief marketing officer of the luxury brand. Becil, who spent nearly seven years at Starwood, most recently was chief marketing at fitness center chain Equinox.

“In his new role, Carlos will partner with executive creative director Stuart Vevers and our global marketing teams to continue to innovate and bring our brand messages to broader audiences around the globe,” Coach CEO Victor Luis told analysts on the call, according to a transcript from Seeking Alpha.

For the second quarter ended Dec. 31, Coach reported:

  • Net sales of $1.322 billion, up 3.8% from $1.274 billion last year.
  • Net income of $199.7 million, up 17.4% from $170.1 million last year.

For the first six months of fiscal 2017, Coach reported:

  • Net sales of $2.359 billion, up 2.4% from $2.304 billion last year.
  • Net income of $317.1 million, up 19.0% from $266.5 million last year.
 

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