— This is the script of CNBC's news report for China's CCTV on February 3, Tuesday.
American luxury retailer Coach might be seeing sales on the slide, but it has also seen improvements on the back of turnaround efforts.
North American sales fell 22%, and while earnings came in on the beat, it was 38% lower than the same quarter a year ago.Turnaround plans have includedly slashing costs by throwing out promotional events, shutting down stores that are underperforming and tweaking some products, led by Creative Director, Stuart Vevers.
Coach has also had to keep it competitiveness, alongside rivals Michael Kors and Kate Spade - both companies that have been using star power of their designers to win over consumers. Coach has tried to keep up by upping the quality of their products with better material and more attractive designs,
So what went wrong with Coach? Analysts say Coach hurt its brand image by the rapid expansion into outlet stores. Discounts and promotions on items, coupled with a lack of investment into full-prices stores was the cause of its downfall, Coach admits.
Analysts though see Coach's decline as something Michael Kors could learn from. The warning signs have started to show for Michael Kors when a report by Barclays unveiled that its brand was the least frequently searched brand in the U.S. compared to its rivals.
And it looks like Coach's turnaround plans are just getting started. The company agreed to by high-end shoe brand Stuart Weitzman in a nearly $57.4 million deal.
I'm CNBC's Qian Chen, reporting from Singapore.
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