Coach 2011 Annual Report Download - page 7

TABLE OF CONTENTS
Footwear — Jimlar Corporation (“Jimlar”) has been Coach's footwear licensee since 1999. Footwear is distributed through select
Coach retail stores, coach.com and about 1,000 U.S. department stores. Footwear sales are comprised primarily of women’s styles, which
coordinate with Coach’s handbag collections.
Jewelry — This category is comprised of bangle bracelets, necklaces, rings and earrings offered in both sterling silver and non-
precious metals.
Sunwear — Marchon Eyewear, Inc. (“Marchon”) has been Coach’s eyewear licensee since 2003 under a licensing agreement that
expired in 2011. During October 2010, the Company signed a licensing agreement with Luxottica Trading and Finance Ltd. (“Luxottica”)
and began transitioning the eyewear business during the second half of fiscal 2012. This collection is a collaborative effort that combines the
Coach aesthetic for fashion accessories with the latest fashion directions in sunglasses. Coach sunglasses are sold in Coach retail stores and
coach.com, department stores, select sunglass retailers and optical retailers in major markets.
Travel Bags — The travel collections are comprised of luggage and related accessories, such as travel kits and valet trays.
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.
Fragrance — Starting in the spring of 2010, Estée Lauder Companies Inc. (“Estée Lauder”), through its subsidiary, Aramis Inc.,
became Coach's fragrance licensee. Fragrance is distributed through Coach retail stores, coach.com, about 4,000 U.S. department and
specialty stores and 500 international locations. Coach offers four women’s fragrance collections and one men’s fragrance. The women's
fragrance collections include eau de perfume spray, eau de toilette spray, purse spray, body lotion and body splashes.
DESIGN AND MERCHANDISING
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 70 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 and 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, eyewear and fragrance) are conceptualized and designed to address the intended market opportunity and
convey the distinctive perspective and lifestyle associated with the Coach brand.
During fiscal 2008, the Company announced a new business initiative to drive brand creativity. This initiative has evolved into the Reed
Krakoff brand, representing New American luxury, which is supported by a team of experienced designers and merchandisers and
encompasses all women’s categories, with a focus on ready-to-wear, handbags, accessories, footwear and jewelry. We introduced the Reed
Krakoff brand with store openings in North America and internationally through specialty retailers in early fiscal 2011.
SEGMENTS
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.
Direct-to-Consumer Segment
The Direct-to-Consumer segment consists of channels that provide us with immediate, controlled access to consumers: Coach-operated
stores in North America; Japan; Hong Kong, Macau, and mainland China; Taiwan; Singapore and the Internet. This segment represented
approximately 89% of Coach's total net sales in fiscal 2012, with North American stores and the Internet, Coach Japan and Coach China
contributing
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