Coach has reported poor results for the second quarter of fiscal 2016.
Comparable sales at the fashion company’s North American stored declined 4% and overall brand sales dipped 7%. Internationally, overall brand sales increased by 4%.
According to a recent study by Goldman Sachs and Teen Vogue, many popular brands that design accessible luxury handbags are “falling flat,” as “it girls,” ages 13-29, abandon the once popular accessory.
The Goldman Sachs report says Coach bags is the “well-owned” brand among it girls, followed by Michael Kors bags.
“In our view, while Coach is far from being a completely broken brand it remains in transition,”Håkon Helgesen, retail analyst at research firm Conlumino, wrote in a note to clients. “In trying to move from a position of ubiquity and volume fueled by promotions, it is struggling to regain the premium, more niche status it once held. As such it is currently stuck in something of a netherworld that is inflicting a measure of financial pain.”
“Admittedly, with Coach’s restructuring efforts and its attempts to move away from excessive discounting, some deterioration to the topline is to be expected,” Helgesen adds.