The hand bag and leather goods luxury store, Coach, reported a 34% increase in their net profits for it's first fiscal quarter. The company reported that it's adoption of lower price points, increased profit margins, along with expansion into developing markets have all contributed to the success. Currently Coach is hoping to expand into chinese market, recognizing the great opportunities in the booming chinese economy.
I believe that Coach is doing well not only because of it's adoption of lower price points, but due to the luxury trend in the market. Households with an income of over $100K have been spending at almost pre recession levels where as households with a lower income are still cautious when it comes to luxury spending.
Or perhaps the reason is as simple as: Some consumers are still willing to sacrifice other necessary expenses such as rent, for the latest, "cutest" bag.
Written by Michael Milner
Article source:
http://online.wsj.com/article/SB10001424052702303390704575575881503013638.html
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ReplyDeleteYour last statement is very true. My twin goes to FIT and there fashion is life. Girls are willing to spend hundreds on a pair of shoes that will go out style next season and then, maybe re-emerge for short period of time in the future. In my opinion, there will always be a buyer, its just a matter of portraying your product as needed or the next big thing.
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