Coach (COH): Extreme Discounting & Declining Demand

   10 Dec 2012

Holiday Season Failing to Generate Interest in Coach Bags

A number of online signals indicated demand trends had shifted away from Coach handbags toward Michael Kors bags. Declining search, lower overall traffic and poorer engagement led us to believe COH was not on track to meet internally set holiday sales targets. We saw an increase in email coupons offering 50% to 70% off. While our data indicated these promotions were generating a response and overall visits were not significantly lower than prior year, the lead quality was poorer. Conversely we saw no deceleration in overall engagement to the Michael Kors e-commerce platform where very limited discounting of key products was evident. Responses from introducing key products on social media platforms were showing divergent results as well. Our monitoring of key 3rd party wholesale accounts also indicated weak sell-through.

On Coach(COH)’s Q2 2013 call, our hypothesis was validated as US domestic comps came in negative and overall sales missed street expectations by near $100mm. Over the following year COH continued to see disappointing results ultimately highlighted by a -25% comp.

Share :

Related Projects