Coach 2009 Annual Report Download - page 7

Download and view the complete annual report

Please find page 7 of the 2009 Coach annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 138

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138

TABLE OF CONTENTS
Travel Bags — The travel collections are comprised of luggage and related accessories, such as travel kits and valet trays.
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 and over 1,500 U.S. department stores.
Coach offers three 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.
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.
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 nearly 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 a brand
of its own, Reed Krakoff, and is supported by a team of experienced designers and merchandisers and will encompass all women’s
categories, with a focus on ready-to-wear, handbags, accessories, footwear and jewelry. Reed Krakoff, as a standalone brand separate from
the Coach brand, will target the New American luxury market. We introduced the Reed Krakoff brand with store openings in North America
and Japan 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, the Internet and the Coach catalog. This segment represented
approximately 87% of Coach’s total net sales in fiscal 2010, with North American stores and the Internet, Coach Japan and Coach China
contributing approximately 64%, 20% and 3% of total net sales, respectively.
North American Retail Stores — Coach stores are located in regional shopping centers and metropolitan areas throughout the U.S.
and Canada. The retail stores carry an assortment of products depending on their size and location. Our flagship stores, which offer the
broadest assortment of Coach products, are located in high-visibility locations such as New York, Chicago, San Francisco and Toronto.
Our stores are sophisticated, sleek, modern and inviting. They showcase the world of Coach and enhance the shopping experience while
reinforcing the image of the Coach brand. The modern store design creates a distinctive environment to display our products. Store
associates are trained to maintain high standards of visual presentation, merchandising and customer service. The result is a complete
statement of the Coach modern American style at the retail level.
3