Meanwhile, Coach eliminated the 25 percent off promotions it often ran at full-priced stores, moving to a schedule of semi-annual sales in January and June instead, which means there wasn't a big sale during the company's fiscal first quarter.
While revenue in the latest period fell 10 percent from the same quarter last year, Coach did beat Wall Street estimates for both profit and sales.
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"We have been too promotional as an industry" said Ron Frasch, operating partner at private equity firm Castanea Partners and former chief merchant at Saks. He explained, "a very quick trigger gets pulled with pricing strategies" that trains consumers to buy only at deeply discounted levels—and that can be unsustainable for long periods of time.
Coach CEO Victor Luis reiterated the launch of Vevers' first collection in September was a "significant milestone" in the transformation journey, which includes steps to cut costs, revamp product and pricing.
Vevers brought a strong pedigree of high-end retail experience to Coach, having worked for Bottega Veneta, Mulberry, Marc Jacobs, Givenchy and Loewe. Coach gave fashionistas and Wall Street alike a preview of his first collection in a New York Fashion Week showcase February.
Coach said it remains on track to launch Vevers product in outlet stores this spring, with only a small assortment available in outlets before the holiday season.
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It's a delicate step. There had been concerns that the popularity of Coach's outlets had cannibalized higher-margin sales at its retail stores. Morgan Stanley analyst Kimberly Greenberg estimates 70 percent of Coach's North American sales come from its outlets.
Without the new collection at outlets in the latest period, this important channel was soft.
Della Badia said traffic levels were weak at outlets in the company's fiscal first quarter, but expects the comparable sales trend to improve.
Key Banc retail analyst Ed Yruma thinks the transformation at Coach "will take time, but we believe that management is taking the right foundational steps to restore the brand."