I also added a bit, but I have some concerns. The men's line --including standalone men's stores-- is something I worried about a lot initially, and so I was surprised to see it's actually developing well (of course, I might not be the best judge of the market for high-end men's leather goods: my wallet cost, if memory serves, $4 at Wal-Mart about ten years ago). One thing I like about Coach is that the accounting is honest; they treat their shareholders as adults. They could easily have made pricing adjustments to bring the sales numbers up to positive comps, but chose to stand firm on pricing and eat the negative comps. I don't have as much of a problem with the discount channel as some people, but I question the wisdom of putting Coach merchandise in department stores and making it susceptible to discounting there: it seems like the worst possible way to cannibalize sales. Margins are my biggest worry going forward. Building out women's apparel will be costly, and I expect it will bring revenues/square foot down appreciably. That doesn't necessarily mean it's a bad decision. They seem to have committed to the strategy of organic growth through diworsification, rather than sticking with what they do best, making $300 handbags. I have a lot of respect for Frankfort, but in the conference call he didn't have much to say in response to the analyst question about who the Coach consumer is, other than that she's intelligent. That's an adjective, not a lifestyle brand.
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