Coach Inc reported its worst decline in sales in seven quarters in North America, raising concerns that the handbag and accessories maker's turnaround efforts were failing to gain traction in a highly competitive market. Shares of the company, which also said it expects current-quarter sales to decline "at similar levels" as the third quarter, fell as much as 8.8 percent on Tuesday. "It will be difficult for Coach to execute its transformation strategy, and the stock is not likely to work during this time," Wells Fargo analyst Paul Lejuez wrote in a note.
The maker of Poppy handbags has been losing out to newer entrants such as Michael Kors Holdings Ltd, Kate Spade & Co and Tory Burch in North America. To stem the decline in sales, the company is renovating some of its stores, closing weaker ones and has cut down on its popular flash sales. It brought in well-known fashion designer Stuart Vevers as creative director to add fresher styles, and said in January it would buy luxury footwear company Stuart Weitzman Holdings LLC.
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