Coach profits rise on back of revamp29 June 2001
The diversification of prestige leather handbag maker Coach into new leather product lines is being credited for a profit upturn at the New York-based company. The company posted profits up 166% to US$8 million on sales up 13% to US$130.6 million in the quarter to the end of March, 2001. The profit surge coincided with the establishment of a much wider product portfolio for the firm. Coach, which was spun off from parent Sarah Lee in October, now focuses on younger customers with a range of up-market products. These include perforated leather headbands at $38; leather desk trays, $105; leather picture frames, $38; and cellphone cases, $68. The move has helped Coach buck the sales downturn that has slammed much of the US's retail industry during the holiday period. Chief executive officer Lew Frankfort said: 'Once we redefined ourselves from a house of leather to a lifestyle accessories brand, everything else fell in place.' Coach, founded in 1941, now consider themselves a part of the 'accessible luxury' segment that appeals to those who buy designer names but who prefer moderate prices. Mr Frankfort is keen to retain Coach's heartland customer base - women of 40-and-over - despite the shift in style. Handbags still remain the core of the brand and account for 55% of worldwide sales.