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US-based luxury brand Coach plans to open 25 stores in China

Updated: 2010-10-25
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Read more on: Coach Inc   China luxury   Coach  
A customer chooses Coach products in the luxury brand's flagship store in Shanghai. [Photo / China Daily] 
 
Coach Inc, the US-based handbag and accessories retailer, plans to open 25 stores in China during its current fiscal year, which ends in June 2011.
 
The company is stepping up efforts to expand its outreach in the country considered to be the fastest-growing luxury goods market in the world.
 
New York-based Coach, which owns 665 stores worldwide, now operates 41 outlets in China. During the past fiscal year, it has opened 15 stores in the market.
 
"China is our biggest opportunity as our brand takes hold and the market continues to develop rapidly," said Lew Frankfort, chairman of Coach Inc, adding that the company has started developing a multi-channel distribution model in China including a flagship store, retail outlets, and shop-in-shop. He said the company is also expecting to accelerate new store openings.
 
A new Coach's retail store will be opened in Dalian, Liaoning province, on Friday.
 
As an accessible luxury brand, Coach sells products at a relatively low price - about half that of some European brands such as Louis Vuitton (LV), Gucci and Prada. In China, Coach's handbags are mostly priced close to 5,000 yuan ($752) while LV and Prada are around 10,000 yuan.
 
"China is growing at a faster pace than expected and we will reach our sales target of $250 million in the market by June 2012, a year ahead of the planned time frame," said Victor Luis, president of Coach's international retail branch.
 
Earlier this month, the US brand announced its international growth strategy, focused on Asian markets, which includes establishing a new international retail organization with three major Asian hubs including the Chinese and Japanese markets.
 
"Coach is now well positioned to drive our directly-operated international retail businesses, while continuing to accelerate the development of the global market and growth through our partnerships around the world," Frankfort said.
 
Coach acquired its domestic retail businesses in April 2009 from its former distributor, ImagineX Group, a Hong Kong-based brand management and distribution company in the luxury market.
 
The company said the direct operation provides greater control over the brand in China, enabling it to raise brand awareness and grow its market share with domestic consumers.
 
According to Coach, the global luxury market for handbags and accessories is about $24 billion and China comprises roughly 10 percent at present.
 
"We estimate that by 2013, the global luxury market for handbags and accessories will be about $29 billion, and China's share will grow to 20 percent from the current 10 percent," Frankfort said.
 
A survey by the US consultancy Bain & Co released this month showed China remains the fastest-growing market for luxury goods, with sales expected to rise 30 percent this year. Global sales are predicted to grow 10 percent.
 
While Coach is exploring the Chinese market, it still sees potential in Europe. The (London) Financial Times reported that the retailer plans to open up to 15 outlets in the United Kingdom over the next three years.
 
In France, it opened its first shop, inside a Printemps store in Paris, in June.
 
Bain said sales in Europe - where luxury brands account for around 75 percent of the global market - will rise 6 percent this year, fuelled by customers from emerging markets like China.
 
SOURCE: China Daily
 
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Comments Area ( Total Comments: 4 )
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