North American Handbag Industry Is Reducing Discounts In Order To Maintain Brand And Maintain Revenue.

From the recent reports of foreign media, we learned that the three Michael Kors, Kate Spade and Coach

After reducing the cost and reducing the discount on products, the brand returns exceed analysts' expectations for the past three quarters.

Michael Kors CEO John Idol said at a conference call last Wednesday that the handbag industry in North America was once booming, but now it is showing a low single digit growth.

Young consumers still buy handbags and

Products, but the style of hobby has changed into a cheap wallet and a small satchel.

For maintenance

To maintain revenue, companies are reducing discounts, increasing new products and cutting costs.

Dorothy Lakner, an analyst at Topeka Capital Markets in New York, said: "it is rumoured that no one will buy handbags anymore, but there was a change in fashion years ago: people gradually stopped buying big handbags and instead bought small bags."

Gradually packet

The flow of goods and sales in North American department stores has led to a large surplus of Kate Spade, Coach, Michael Kors and other brand products. They have to make room for new products through discounts.

Moreover, while international expansion has promoted sales, the strong US dollar also affected domestic tourism sales and consumed some foreign profits.

According to Bloomberg compiled data, even after the restructuring, Kate Spade's handbag sales still account for 70% of its revenue.

Since 2013, the company has sold its brand Lucky and Juicy Couture, improving the company's business operations.

In 2014, she began a comprehensive reform, focusing on the management of electric business again. Today, the total sales of electricity suppliers account for 20%.

The company is moving into home products, and launched 325 household products last month.

Rationalization of expenditure is likely to be effective.

Kate Spade's net sales in the third quarter amounted to $27 million 500 thousand, lower than analysts' estimate of $28 million 120 thousand, while the company recorded a profit of 6 cents per share, excluding the special items, exceeding the analyst's estimated 4 cents.

The number of days is getting smaller.

Michael Kors released its second quarter profits, and by September 26th last year, the company's earnings per share amounted to $1.01, exceeding analysts' estimate of 89 cents per share.

However, Michael Kors London Company expects revenue in the third quarter to be $13.3 to $1 billion 350 million, less than analysts estimate for $1 billion 400 million.

Coach the results are similar there.

Last week, Coach said its profits, excluding special items, were 41 cents a share in the first quarter, exceeding analysts' expectations.

The New York company's sales volume was $1 billion 30 million, which did not meet the analyst's estimated $1 billion 40 million.

"Products must be scarce and there will be less surplus stock to sell at the end of the year," Lakner said. "Michael Kors is withdrawing stock from department stores. Similarly, Coach is also reducing the number of discount activities."

Developing other categories of products

Although the three companies say they have withdrawn the discount, they are trying to boost growth by developing other categories of products.

Recently, Kate Spade has introduced the home line, and Michael Kors has expanded its business license for watches, accessories and spectacles.

Handbag manufacturers may expect cooperative retailers to promote market performance through restructuring and spending cuts, and Ralph Lauren Corp., which is the main source of original life, announced last May that it would save 11 million dollars a year after 2017 restructuring.

The efficiency of growth is that the Ralph Lauren group's monthly earnings excluding special items increased to $2.13 per share, exceeding analysts' estimated earnings of $1.73 per share.

Nevertheless, sales fell by 6% over the same period last year, Ralph Lauren said last Tuesday.

That's 3.8% more than analysts forecast.

"It's imperative to focus on new products and reduce inventories," Lakner said.