Coach 2006 Annual Report Download - page 4

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Handbags 64% 65% 65%
Accessories 28 28 27
All other products 8 7 8
Total 100% 100% 100%
Handbags — Handbag collections feature classically inspired designs as well as fashion designs. Typically, there are three to four
collections per quarter and four to seven styles per collection. Periodically, we also offer new lifestyle collections, which are collections
designed to meet the fashion and functional requirements of our broad and diverse consumer base. During fiscal 2007, we introduced three
major lifestyle collections: Signature Stripe, Legacy and Ergo. In fiscal 2008, we plan to introduce three additional major lifestyle collections:
Bleecker, Heritage Stripe and Soho.
Accessories — Accessories include women’s and men’s small leather goods, novelty accessories and women’s and men’s belts.
Women’s small leather goods, which coordinate with our handbags, include money pieces, wristlets, and cosmetic cases. Men’s small
leather goods consist primarily of wallets and card cases. Novelty accessories include electronic, time management and pet accessories. Key
fobs and charms are also included in this category.
Footwear — Jimlar Corporation (“Jimlar”) has been Coach’s footwear licensee since 1999. Footwear is distributed through over 700
locations in the U.S., including leading Coach retail stores and U.S. department stores. Footwear sales are comprised primarily of women’s
styles, which coordinate with Coach’s handbag collections.
Outerwear — This category includes jackets, sweaters, gloves, hats and scarves. The assortment is primarily women’s and contains
a fashion assortment in all components of this category.
Business Cases — This assortment is primarily men’s and includes computer bags, messenger-style bags and totes.
Sunwear — Marchon Eyewear (“Marchon”) has been Coach’s eyewear licensee since 2003. This collection is a collaborative effort
from Marchon and Coach that combines the Coach aesthetic for fashion accessories with the latest fashion directions in sunglasses. Coach
sunglasses are sold in Coach retail stores, department stores, select sunglass retailers and optical retailers in major markets.
Watches — Movado Group, Inc. (“Movado”) has been Coach’s watch licensee since 1998 and has developed a distinctive collection of
watches inspired primarily by the women’s collections with select men’s styles.
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Travel Bags — The travel collections are comprised of luggage and related accessories, such as travel kits and valet trays.
Jewelry — In November 2006, Coach launched a jewelry line, consisting primarily of bangle bracelets. The Company plans to expand
this category by introducing sterling silver, glass and gold plated brass pieces in fiscal 2008.
Fragrance — In March 2007, Coach launched its first fragrance in partnership with Beauty Bank, a division of Estee Lauder, Inc.
This collection includes a perfume spray, a purse spray and a perfume solid and is sold exclusively in Coach stores and on the Coach
internet site. The Company plans to expand this category by introducing body lotions in fiscal 2008.
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Coach’s New York-based design team, led by its Executive Creative Director, is responsible for conceptualizing and directing the design
of all Coach products. Designers have access to Coach’s extensive archives of product designs created over the past 65 years, which are a
valuable resource for new product concepts. Coach designers are also supported by a strong merchandising team that analyzes sales, market
trends and consumer preferences to identify business opportunities that help guide each season’s design process. Merchandisers also
analyze products to edit, add and delete to achieve profitable sales across all channels. The product category teams, each comprised of
design, merchandising/product development and sourcing specialists, help Coach execute design concepts that are consistent with the
brand’s strategic direction.
Coach’s design and merchandising teams work in close collaboration with all of our licensing partners to ensure that the licensed
products (watches, footwear and eyewear) are conceptualized and designed to address the intended market opportunity and convey the
distinctive perspective and lifestyle associated with the Coach brand.
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Coach operates in two reportable segments: Direct-to-Consumer and Indirect. The reportable segments represent channels of distribution
that offer similar products, service and marketing strategies.
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The Direct-to-Consumer segment consists of channels that provide us with immediate, controlled access to consumers: retail stores and
factory stores in North America and Japan, the Internet and Coach catalogs. This segment represented approximately 80% of Coach’s total
net sales in fiscal 2007, with North American stores and Coach Japan contributing approximately 58% and 18% of total net sales,
respectively.
North American Retail Stores — Coach stores are located in upscale regional shopping centers and metropolitan areas. The retail