Coach 2010 Annual Report Download - page 10

TABLE OF CONTENTS
Coach’s products are sold in approximately 970 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 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 markets: South Korea, Taiwan, Mexico, US & Territories, Singapore, Australia, Malaysia, Saudi Arabia, France, Japan,
Thailand, UAE, Hong Kong, Spain, China, Indonesia, Bahamas, Bahrain, India, Macau, New Zealand, Portugal, United Kingdom and
Vietnam.
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 mid-July 2010, Coach entered into an agreement with a key distributor to take control of our domestic retail businesses in Singapore
and Malaysia. Coach will begin directly operating these markets in fiscal 2012 and fiscal 2013, respectively.
Subsequent to July 2, 2011, Coach entered into distribution agreements for Brazil and Vietnam, with first openings in these countries
anticipated in fiscal 2012.
The following table shows the number of international wholesale locations at which Coach products are sold:
Fiscal Year Ended
July 2,
2011
July 3,
2010
June 27,
2009
International freestanding stores 61 53 44
International department store locations 109 93 81
Other international locations 41 36 34
Total international wholesale locations 211 182 159
Licensing — In our licensing relationships, Coach takes an active role in the design process and controls the marketing and
distribution of products under the Coach brand. The current licensing relationships as of July 2, 2011 are as follows:
Category Licensing
Partner
Introduction
Date
Territory License
Expiration Date
Watches Movado Spring '98 Worldwide 2015
Footwear Jimlar Spring '99 U.S. 2014
Eyewear Marchon Fall '03 Worldwide 2011
Eyewear Luxottica Spring '12 Worldwide 2016
Fragrance Estee Lauder Spring '10 Worldwide 2015
Products made under license are, in most cases, sold through all of the channels discussed above and, with Coach’s approval, these
licensees have the right to distribute Coach brand products selectively through several other channels: shoes in department store shoe salons,
watches in selected jewelry stores and eyewear in selected optical retailers. These venues provide additional, yet controlled, exposure of the
Coach brand. Coach’s licensing partners pay royalties to Coach on their net sales of Coach branded products. However, such royalties are
not material to the Coach business as they currently comprise less than 1% of Coach’s total net sales. The licensing agreements generally
give Coach the right to terminate the license if specified sales targets are not achieved.
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