Coach Plans 30 US Stores

NEW YORK CITY-Leather handbag and accessory retailer Coach Inc. said it will open at least 30 new stores in the United States in fiscal 2007, adding about 100,000 sf, or 12%, to its retail base throughout the country.

The New York-based firm, which currently has 300 stores in the US and 200 retail locations in 19 other countries, said it also opened 12 retail stores and three factory stores in the US during the quarter ending July 1, 2006.

The company’s expansion plans come as rising demand for Coach’s leather handbags and accessories continue to increase, giving the company its fifth consecutive year of double digit sales and earnings. For the fourth quarter, sales jumped 23% while profits were up 31%, the company said.

Net income for the fourth quarter was higher than analysts estimates at $117.6 million, or 31 cents per share, up from $89.9 million, or 23 cents per share, from the same period a year earlier. Sales also showed strong improvement, rising across all lines by 23% to $514 million with comparable store sales up 20%. Coach said sales also increased 12% in Japan due to increased market share and despite lackluster growth in the category.

The firm opened six new locations in that country during the quarter for a total of 122 stores in Japan, including eight flagship locations. “This quarter’s performance demonstrated a continuation of the strength we have seen throughout the year, as our market share continued to grow across all channels and geographies,” said Lew Frankfort, Coach’s chairman and chief executive officer, adding that the firm’s performance reflects “a vibrancy in the premium accessory category.”

The company said it expects strong performance in fiscal 2007 with earnings of at least $1.55 per share and sales of $2.5 billion. For the first quarter, Coach said it expects sales of $535 million and earnings of 30 cents per share.

Three new product lines that will be introduced in 2007 are expected to help those numbers, Frankfort said. Those lines include a collection centered around reversible totes called Signature Stripe, a lightweight spring line known as Ergo and a group of rich leathers called Legacy