Coach 2011 Annual Report Download - page 13

TABLE OF CONTENTS
MANAGEMENT INFORMATION SYSTEMS
The foundation of Coach's information systems is its Enterprise Resource Planning (“ERP”) system. This fully integrated system
supports all aspects of finance and accounting, procurement, inventory control, sales and store replenishment. The system functions as a
central repository for all of Coach's transactional information, resulting in increased efficiencies, improved inventory control and a better
understanding of consumer demand. This system was upgraded in fiscal 2008, continues to be the most current version available, and is
fully scalable to accommodate growth.
Complementing its ERP system are several other system solutions, each of which Coach believes is well suited for its needs. The data
warehouse system summarizes the transaction information and provides a single platform for all management reporting. The supply chain
management system supports sales and inventory planning and reporting functions. Product fulfillment is facilitated by Coach's highly
automated warehouse management system and electronic data interchange system, while the unique requirements of Coach's internet
business are supported by Coach’s order management system. Finally, the point-of-sale system supports all in-store transactions,
distributes management reporting to each store, and collects sales and payroll information on a daily basis. This daily collection of store
sales and inventory information results in early identification of business trends and provides a detailed baseline for store inventory
replenishment. Updates and upgrades of these systems are made on a periodic basis in order to ensure that we constantly improve our
functionality. All complementary systems are integrated with the central ERP system.
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 and American
luxury brands as well as private label retailers, including some of Coach’s
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