Coach 2007 Annual Report Download - page 6

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Internet — Coach views its website as a key communications vehicle for the brand to promote traffic in Coach retail stores and
department store locations and build brand awareness. During fiscal 2008, we completed a creative refresh of the coach.com website and
launched coach.com in Canada. We also introduced store pickup, allowing a customer to purchase online and pick up her order in the store.
With approximately 55 million unique visits to the website in fiscal 2008, our online store provides a showcase environment where
consumers can browse through a selected offering of the latest styles and colors. During fiscal 2008, the Company sent approximately 67
million emails to strategically selected customers as we continue to evolve our internet outreach to maximize productivity while streamlining
distribution. Revenue from Internet sales is recognized upon shipment of the product.
Coach Catalog — While direct mail sales comprise a small portion of Coach's net sales, Coach views its catalog as a key
communications vehicle for the brand to promote store traffic, facilitate the shopping experience in Coach retail stores and build brand
awareness. In fiscal 2008, the Company distributed approximately 7 million catalogs in Coach stores in North America and Japan and
mailed approximately 3 million catalogs to strategically selected North American households from its database of customers.
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Coach began as a U.S. wholesaler to department stores and this segment remains important to 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 20% of total net sales in fiscal 2008, with U.S. Wholesale and International Wholesale representing approximately
12% and 6% of total net sales, respectively.
U.S. Wholesale — This channel offers access to Coach products to consumers who prefer shopping at department stores. Coach
products are also available on macys.com, dillards.com and nordstrom.com. While overall U.S. department store sales have not increased
over the last few years, the handbag and accessories category has grown, in part due to the strength of the Coach brand. Net sales
(shipments) to U.S. wholesale customers grew 16% in fiscal 2008 from fiscal 2007.
Coach recognizes the continued importance of U.S. department stores as a distribution channel for premier accessories. Department
stores also continue to devote increased square footage to Coach, providing an additional driver to this channel’s growth. We continue to fine-
tune our strategy to increase productivity and drive volume by enhancing presentation, primarily through the creation of more shop-in-
shops, and the introduction of caseline enhancements with proprietary Coach fixtures. Coach has also improved wholesale product planning
and allocation processes by custom tailoring assortments to better match the attributes of our department store consumers in each local
market.
Coach's products are sold in approximately 900 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 and Taylor, Carson’s and Saks.
International Wholesale — This channel represents sales to international wholesale distributors and authorized retailers. Tourists
represent 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 markets: Korea, United States (primarily Hawaii and Guam), Hong Kong, Taiwan, Japan, Singapore, Saudi Arabia, Mexico,
China, Malaysia, Thailand, Australia, Indonesia, the United Arab Emirates, the Caribbean, Saipan, Turkey, Bahrain, New Zealand,
France, United Kingdom, Greece and Russia. 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, Lotte Group, Shilla Group, Tasa Meng Corp., Shinsegae International, and
ImagineX. Following completion of the acquisition of the retail businesses in Greater China from ImagineX in fiscal 2009, sales in Coach-
operated stores in this region will be reported in the Direct segment.
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The following table shows the number of international wholesale locations at which Coach products are sold:
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International freestanding stores 53 37 21
International department store locations 83 74 63
Other international locations 31 29 24
Total international wholesale locations 167(1) 140 108
(1) Includes 24 stores that will become Coach-operated upon completion of the acquisition of the retail businesses in Greater China from
ImagineX.