Coach 2010 Annual Report Download - page 13

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TABLE OF CONTENTS
TRADEMARKS AND PATENTS
Coach owns all of the material trademark rights used in connection with the production, marketing and distribution of all of its
products, both in the U.S. and in other countries in which the products are principally sold. Coach also owns and maintains worldwide
registrations for trademarks in all relevant classes of products in each of the countries in which Coach products are sold. Major trademarks
include Coach, Coach and lozenge design, Coach and tag design, Signature C design, Coach Op Art design and The Heritage Logo
(Coach Leatherware Est. 1941). Coach is not dependent on any one particular trademark or design patent although Coach believes that the
Coach name is important for its business. In addition, several of Coach’s products are covered by design patents or patent applications.
Coach aggressively polices its trademarks and trade dress, and pursues infringers both domestically and internationally. It also pursues
counterfeiters domestically and internationally through leads generated internally, as well as through its network of investigators, the Coach
hotline and business partners around the world.
Coach expects that its material trademarks will remain in existence for as long as Coach continues to use and renew them. Coach has no
material patents.
SEASONALITY
Because Coach products are frequently given as gifts, Coach has historically realized, and expects to continue to realize, higher sales
and operating income in the second quarter of its fiscal year, which includes the holiday months of November and December. In addition,
fluctuations in sales and operating income in any fiscal quarter are affected by the timing of seasonal wholesale shipments and other events
affecting retail sales. Over the last several years, we have achieved higher levels of growth in the non-holiday quarters, which has reduced
these seasonal fluctuations.
GOVERNMENT REGULATION
Most of Coach’s imported products are subject to existing or potential duties, tariffs or quotas that may limit the quantity of products
that Coach may import into the U.S. and other countries or may impact the cost of such products. Coach has not been restricted by quotas
in the operation of its business and customs duties have not comprised a material portion of the total cost of its products. In addition, Coach
is subject to foreign governmental regulation and trade restrictions, including retaliation against certain prohibited foreign practices, with
respect to its product sourcing and international sales operations.
COMPETITION
The premium handbag and accessories industry is highly competitive. The Company mainly competes with European luxury brands
as well as private label retailers, including some of Coach’s wholesale customers. Over the last several years the category has grown,
encouraging the entry of new competitors as well as increasing the competition from existing competitors. The Company believes, however,
that as a market leader we benefit from this increased competition as it drives consumer interest in this brand loyal category.
The Company further believes that there are several factors that differentiate us from our competitors, including but not limited to:
distinctive newness, innovation and quality of our products, ability to meet consumer’s changing preferences and our superior customer
service.
EMPLOYEES
As of July 2, 2011, Coach employed approximately 15,000 people, including both full and part time employees. Of these employees,
approximately 5,200 and 6,800 were full time and part time employees, respectively, in the retail field in North America, Japan, Hong
Kong, Macau, and mainland China. Approximately 65 of Coach’s employees are covered by collective bargaining agreements. Coach
believes that its relations with its employees are good, and it has never encountered a strike or work stoppage.
FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS
See the Segment Information note presented in the Notes to the Consolidated Financial Statements for geographic information.
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