American Luxury Handbag And Accessories Brand Coach Is Still Paralyzed.

Due to the weak demand for handbags and accessories, the results of the fourth quarter of 2015 fiscal year released on the evening of Coach8 4 showed that its battalion received nearly 12% to 1 billion U.S. dollars, which is its eighth consecutive quarterly decline. What is the reason? Coach China's slowdown is also affected by a slowdown in the overall consumer environment, anti-corruption policies, consumption outflows caused by exchange rates, and others. Luxury goods Price reduction and other factors.

China's growth rate slows down

According to the financial report, as of the 2015 fiscal year of June 27th this year, the net sales of Coach fell from 13% US dollars to US $4 billion 190 million from US $4 billion 810 million in the last fiscal year. The net income of the fiscal year was $531 million before the relevant cost and acquisition cost of brand spanformation, down 48.5% from the previous year's $870 million.

According to the constant exchange rate, Coach international business has achieved moderate growth, with double-digit growth in the European region, while China's mainland market has driven nearly 600 million US dollars in sales, but the growth rate has slowed down significantly over the previous two years.

In fiscal year 2015, it is converted into US dollars and calculated at a constant exchange rate. Coach Sales in China increased by only 9% to about $595 million, while sales in the same store grew positively while channel growth slowed. In particular, in the fourth quarter, the sales volume of China's Coach converted into US dollar increased by 5%, the sales rate calculated by constant exchange rate increased by 4%, the channel growth slowed down and the same store sales declined slightly, while in the third quarter, China's regional sales increased 10%, and the sales volume converted into US dollar increased 8%.

A luxury industry insider told reporters that "Coach China's growth rate is slowing down. Apart from the continued downturn in the macroeconomic and consumer environment as well as other anti-corruption policies in other luxury groups, the price differentials caused by exchange rate factors also make Chinese consumers rush to Europe and other places to buy luxury goods. In addition, this year, the global coordination price of Chanel, Gucci and other traditional luxury brands led to China's price reduction or increased discount strength, and so on, which made a big impact on Coach's brand.

The Chinese market has been a powerful driving force for Coach growth for quite some time. In fiscal year 2013, sales of Coach in China amounted to $430 million, an increase of 40% over the 2012 annual sales volume. In the 2014 fiscal year, the Coach market was strong despite the double fall in revenues and profits. Its net sales decreased by 5% to US $4 billion 810 million from US $5 billion 80 million in the previous fiscal year, and net income decreased 18.7% to 870 million US dollars from 1 billion 70 million US dollars in the same period last year. However, its sales in China increased by more than 25% to 545 million US dollars over the same period, and double-digit growth in same store sales.

For the latest performance, Coach claims that the sales performance in China is consistent with the plan. "The sales performance in mainland China is as strong as expected, showing double-digit growth, partly driven by same store sales growth, while Hongkong and Macao are affected by a significant decrease in the number of mainland tourists, and the sales performance is relatively weak."

Yang Baoyan (YannBozec), the president and chief executive of Coach China, said in an interview with the first financial daily, although the growth rate of Coach China slowed, "I understand that the growth rate of Coach China is higher than the market average, and the share of the Chinese market is maintaining an ideal growth." Like China's GDP growth mode, Coach now pays more attention to the quality of growth, focusing on long-term value and sustained growth.

It is worth noting that in the 2015 fiscal year, Coach closed 49 shops, with 965 shops operating at the end of the fiscal year, and 1014 at the end of last fiscal year. Among them, the North American market closed 77 shops, the Japanese market closed 2, while the Chinese market increased by 18 to 171, while the other Asian markets and the European market increased by 5 and 7 respectively.

Will sales increase in 2016?

For the 2015 financial year's performance, chief executive officer Coach VictorLuis "Last year, the comprehensive plan for revitalizing brand and business has made progress in the fourth quarter and the whole year. The implementation and performance of these strategic measures are in line with expectations. "

It has dug StuartVever from the Spanish leather and high-end fashion brand Loewe of LVMH group as its Executive Creative Director, who has worked in brands such as Mulberry, BottegaVeneta, Givenchy and LouisVuitton. Luis said that in fiscal year 2015, Coach has already introduced products designed by StuartVevers in multi-channel distribution network.

At the same time, Coach bought $574 million from private Holdings Company SycamorePartners this year to buy luxury women's shoes design and manufacture brand StuartWeitzman. Luis said that this is an important step for Coach to become a multi brand enterprise, which is expected to add new growth momentum to the company.