With a faster growth rate than its top two markets in the U.S. and Japan, upscale handbag seller Coach Inc. said Wednesday it's accelerating its growth strategies in China and revising its long-range plans there "substantially higher", reported MarketWatch.
The New York-based company increased its store opening plan in China to 15 from 10 this fiscal year, including the opening of its first flagship in the market. Executives also said they "feel very good" that China could turn profitable next year and be "meaningful" to Coach's results. Coach bought its distributor in the market last fiscal year.
The company in May 2008 had projected that it would open 50 stores in China over five years, a pace of 10 stores a year and targeted a 10% share, or $250 million, of the market that it estimated could grow to $2.5 billion in about five years.
China's potential is evident in part by the low level of awareness of the Coach brand. In China, only 8% of its target consumers are aware of its brand "unaided" (without people telling them, for example), compared with 72% in the U.S. and 63% in Japan. About 94% of Coach's existing consumers there also plan to buy Coach again, a level higher than that either in the U.S. or Japan, he said.
The company had 37 locations in China, including store counts in Hong Kong and Macau, at the end of the quarter on Dec. 26. That compared with the 343 retail stores and 118 discount factory stores it owned in North America. It had 163 sales locations in Japan.
