Coach 2011 Annual Report Download - page 10

TABLE OF CONTENTS
Indirect Segment
Coach began as a U.S. wholesaler to department stores and this segment remains a part of our overall consumer reach. Today, we work
closely with our partners, both domestic and international, to ensure a clear and consistent product presentation. The Indirect segment
represented approximately 11% of total net sales in fiscal 2012, with U.S. Wholesale and Coach International representing approximately
6% and 4% of total net sales, respectively. The Indirect segment also includes royalties earned on licensed product.
U.S. Wholesale — This channel offers access to Coach products to consumers who prefer shopping at department stores. Coach
enhances presentation, within the department store environment, primarily through the creation of more shop-in-shops with proprietary
Coach fixtures. Coach custom tailors its assortments through wholesale product planning and allocation processes to better match the
attributes of our department store consumers in each local market. Coach products are also available on macys.com, dillards.com,
bloomingdales.com, lordandtaylor.com, belk.com, vonmaur.com and nordstrom.com. While overall U.S. department store sales have
slowed over the last few years, the handbag and accessories category has remained strong. The Company continues to closely manage
inventories in this channel given the highly promotional environment at point-of-sale.
Coach's products are sold in approximately 990 wholesale locations in the U.S. and Canada. Our most significant U.S. wholesale
customers are Macy’s (including Bloomingdale's), Dillard's, Nordstrom, Lord & Taylor, Carson’s, the Bay and Saks Fifth Avenue.
Coach International — This channel represents sales to international wholesale distributors and authorized retailers. Travel retail
represents the largest portion of our customers’ sales in this channel. However, we continue to drive growth by expanding our distribution to
reach local consumers in emerging markets. Coach has developed relationships with a select group of distributors who sell Coach products
through department stores and freestanding retail locations in over 20 countries. Coach's current network of international distributors serves
the following domestic and/or travel retail markets: South Korea, US & Territories, Taiwan, Malaysia, Hong Kong, Mexico, Saudi Arabia,
Thailand, Japan, Australia, Singapore, UAE, France, China, Macau, Indonesia, Kuwait, Bahamas, Aruba, Vietnam, New Zealand,
Bahrain, India and Brazil.
For locations not in freestanding stores, Coach has created shop-in-shops and other image enhancing environments to increase brand
appeal and stimulate growth. Coach continues to improve productivity in this channel by opening larger image-enhancing locations,
expanding existing stores and closing smaller, less productive stores. Coach's most significant international wholesale customers are the
DFS Group, Shinsegae International, Tasa Meng Corp, Lotte Group and Shilla Group.
In connection with the fiscal 2011 agreement with the Valiram Group, the Company assumed direct control of its domestic retail
business in Malaysia in July 2012. Additionally, in connection with the fiscal 2012 agreement with Shinsegae International, the Company
assumed direct control of its retail business in Korea in early August 2012.
In fiscal 2013, the Company will be expanding further into Latin America through distributor partners to customers in Venezuela,
Colombia, Panama and Peru.
The following table shows the number of international wholesale locations at which Coach products are sold:
Fiscal Year Ended
June 30,
2012
July 2, 2011 July 3, 2010
International freestanding stores 77 61 53
International department store locations 87 109 93
Other international locations 41 41 36
Total international wholesale locations 205 211 182
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