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China Important For Coach's Long Term Growth?

China Important For Coach's Long Term Growth?

Facing slower sales growth in North America, Coach is focusing on China to drive its future growth
    China currently represents less than 7% of Coach’s sales, however, we expect this share to grow rapidly in the future on account of strong demand in the Chinese luxury market and Coach’s aggressive expansion plans in the region
    The Chinese luxury market is estimated to account for one-third of the global luxury market by 2015
    Government measures to check corruption and change in Chinese culture are certain factors that present roadblocks to growth
    Coach aims to aggressively expand its operations in China to grow its 6% market share in the region.

Coach Inc. is a leading American marketer of luxury handbags and other fashion accessories. With slower sales growth in the North American region, it is focusing on China to drive its business. Coach registered 40% growth in annual sales in China in its most recent quarter as compared to a mere 1% annual growth in the North American market.

China’s luxury market is growing rapidly fueled by an expanding middle class, rising credit card penetration and higher luxury spending by women. We believe that the market will continue to grow at a strong pace in the future. While sales in China accounted for less than 7% of Coach’s sales in fiscal 2012, we estimate the proportion to increase in the future as Coach aims to aggressively expand its presence in the region.

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