Stilettos can propel one to new heights. Coach hopes that the $574m acquisition of luxury shoemaker Stuart Weitzman will do just that.
Once a popular accessories company, Coach has for years been struggling to appeal to the young, affluent, urban types that it targets. A study from Consumer Edge Research shows that these trendy youngsters have been fleeing. Why? They find the brand is not “aspirational” enough. The research, conducted in the third quarter of last year, found that among 18 to 24-year-olds, just 17 per cent found Coach “aspirational”. The figure was 21 per cent a year earlier. There were similar declines among older consumers. And only 9 per cent of those earning more than $200,000 a year found the brand desirable, half the level of a year earlier.
In the face of such consumer apathy, same-store sales in North America have been falling for the past few quarters. In the three months ending in September, same-store sales were down 24 per cent. Coach shares fell a third last year. Its market capitalisation, which stood at over $22bn in 2012, is now down to $10bn.