U.S. luxury handbag maker Coach Inc. continues to pin its hopes on booming luxury goods consumption in China, where its sales grew almost 60 percent year-on-year in its fiscal third-quarter earnings.
China has been a big strategic initiative for Coach, and sales have been rising healthily, according to Lew Frankfort, chief executive officer of the company.
Frankfort said he expects the Chinese market to gradually turn in annual revenue of at least $300 million, and that Coach would aim to tap into the men's luxury goods market in the coming years.
"We expect to broadly expand the presence of our men's products in the North American market, starting from the current 42 stores by end of Q3 to around 100," the Beijing Business News quoted Frankfort as saying.
For the quarter ended March 31, Coach reported a profit of $225 million, or 77 cents a share, up from $186 million, or 62 cents, a year earlier. Sales jumped 17 percent to $1.11 billion.
Sales were up 10 percent in Japan, on a constant-currency basis.
China, which the company calls its largest geographic growth opportunity, saw sales bolstered by distribution growth and double-digit same-store sales. Indirect sales rose 10 percent to $125 million.
Chinese consumer spending on luxury items remains relatively unscathed by a projected slowdown in economic growth and overlapping uncertainties in the global market, drawing in luxury brands including Coach, Prada and LV to cash in on the growing number of college-educated, well-dressed Chinese individuals with large enough disposable incomes.
French luxury goods giant LVMH Moet Hennessy Louis Vuitton SA is looking for new ways to reach luxury consumers in Asia, having launched a Chinese-language version of its editorial-only platform nowness.com.
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