Coach’s fourth quarter earnings got a boost from men’s goods and China which offset weakness in the company’s North American women’s business.
China continues to shine for Coach. China sales increased by 20 percent in the quarter compared to the same period a year ago, helped by double-digit growth in comparable store sales. For the year, China sales jumped by 25 percent to US$545 million, accounting for about 10 percent of total sales.
With plans to expand into tier 3 and tier 4 cities, Coach projects China sales to rise by 10 percent in the year ending June 2015.
Coach’s stellar China results shows how aspirational and lifestyle brands are appealing to China’s growing middle class and in contrast to LVMH which recently reported weaker Chinese demand. Luxury companies, such as LVMH, have been hurt by a shift away from conspicuous spending among Chinese luxury consumers and growing competition from mid-tier, aspirational brands.
Jonathan Seliger, Coach China president and CEO said in May, “China is our No 1 geographical opportunity in the world.”
image source: coach china