Coach’s dilemma is not over

There are many articles reminding people the value of Coach in investment communities recently after its stock price dropped so much so. Yes. The value of Coach brand and its ability to generate cash is obvious. In fact, I was a big fan of Coach, which was a major holding in my portfolio until early last year. Coach had maded a lot of money, so had its investors.

The problem in Coach started a few years ago, when they opened outlets restlessly and started so called life style products, especially the jackets with cheap material. The Coach’s management has been milking the brand over the last few years to show good financial figures. They are keeping opening more outlets than full price stores even now.

The new autumn serials designed by the new design director, Mr. Stuart Vevers, will not save Coach. It will be most likely rejected by Coach’s royal customers. It looks cheap and is more suitable for young girls instead of successful middle aged women who are Coach’s major customers I believe.

In short, Coach’s main enemy is its management.