Coach 2007 Annual Report Download - page 4

watches, travel bags and fragrance. The following table shows the percent of net sales that each product category represented:
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Handbags 62% 64% 65%
Accessories 29 28 28
All other products 9 8 7
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. These collections are designed to meet the fashion and functional requirements
of our broad and diverse consumer base. During fiscal 2008, we introduced three major lifestyle collections: Bleecker, Heritage Stripe and
Soho. In fiscal 2009, we plan to introduce additional lifestyle collections, including the Zoe handbag group and Madison. We will also
launch a new design, Coach Op Art, which will provide us with an entirely new logo platform.
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 900
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.
Jewelry — In November 2006, Coach launched a jewelry line, consisting primarily of bangle bracelets. During fiscal 2008, this
category was expanded to include sterling silver jewelry and gold plated fashion jewelry.
Wearables — This category is comprised of jackets, sweaters, gloves, hats and scarves, including both cold weather and fashion. 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.
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Sunwear — Marchon Eyewear, Inc. (“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.
Travel Bags — The travel collections are comprised of luggage and related accessories, such as travel kits and valet trays.
Fragrance — In March 2007, Coach launched its first fragrance in partnership with Beauty Bank, a division of Estée Lauder, Inc.
This collection includes a perfume spray, a purse spray and a perfume solid and is sold exclusively in Coach stores and coach.com. During
fiscal 2008, this category was expanded to include body lotion and lip gloss. Coach’s second fragrance will be launched in fiscal 2009.
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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.
During fiscal 2008, the Company announced a new business initiative, internally referred to as Collection, to drive brand creativity.
This initiative will be supported by a new team of designers and merchandisers and will encompass all women’s categories, with a focus on
handbags, women’s accessories, footwear and jewelry. We expect to introduce Collection product in fiscal year 2010.
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.
Direct-to-Consumer Segment