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Coach bringing discounts to full-price stores

Adam Jeffery | CNBC

Already facing criticism from Wall Street for diluting its brand through a heavy outlet presence, Coach said it will start offering discounts on its handbags at its full-price U.S. stores.

According to a Bloomberg article, the affordable luxury handbag maker will hold sales twice a year starting this month, diverging from its former strategy to avoid discounting at its branded non-outlet stores.

Coach already follows this promotional strategy in its overseas stores, and its products can also be purchased on sale from department stores.

"The first sale will likely be met with criticism from the investment community and confusion from customers," Macquarie analyst Liz Dunn said in a note to investors.

Sterne Agee analyst Ike Boruchow earlier this week downgraded Coach to neutral from buy, saying "not only have North American comps been negative for the past 18 months, the declines have been getting larger."

In the most recent quarter, the handbag maker's domestic same-store sales fell 21 percent.

To read the full Bloomberg story, click here.

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