In a break with tradition, Coach will begin selling handbags at a discount in its North American stores. It was one of the few fashion and luxury brands that had refused to offer sales at its U.S. stores.
Coach will reduce prices on some end-of-season and discontinued handbags by 30 to 50 percent. The handbags will go on sale in June and January. Coach is planning to keep the sales low-key, rather than promote them the way other brands do. The company believes that will be better for the long-term success of the brand.
The company is making the move to be more in line with the practices of other fashion, lifestyle, and luxury brands. Coach already runs sales in its stores overseas.
Coach has previously offered 25-percent-off coupons in its factory outlets, and its handbags have been made available on sale at department stores, such as Macy’s. Coach has also participated in third-party flash sites that run short-term sales on limited numbers of products, but it has been reducing its involvement in those sales.
Coach has been struggling recently with competition from other luxury handbag designers, such as Michael Kors, Kate Spade, and Tory Burch. CEO Victor Luis has been trying to transition Coach into a lifestyle brand by selling other products, such as shoes, coats, and accessories. He has also changed the company’s design team. Coach is refurbishing its stores and plans to launch new products in the fall.
So far, the strategy has not worked. Sales are down at many North American stores. The company plans to host an analyst day on June 19.
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