Coach Q4 profit drops 12%; announces exec shake-up
New York -- Coach Inc. on Tuesday reported a 12% drop in net income in its fourth quarter amid weaker same-store sales in North America, and also said it would sell its Reed Krakoff business to a group led by Reed Krakoff, who will depart the company as executive creative director when the deal is completed.
In other news, Coach announced a series of executive changes and said North American Group president Mike Tucci and president and COO Jerry Stritzke have decided to leave the company at the end of August. Francine Della Badia, currently executive VP, responsible for all North America Retail merchandising, planning and allocation as well as Coach’s global men’s and factory merchandising, will succeed Tucci as president North America Retail.
Coach’s net income for the quarter ended June 29 fell to $221.3 million from $251.4 million a year earlier
Overall revenue increased 5.8% to $1.22 billion in the fourth quarter, helped by gains in men's merchandise and in China. Same-store sales were down 1.7% in North America. It was the second drop in North American same-store sales in the last three quarters.
Coach said that it anticipates the Reed Krakoff deal to close in the first quarter of its new fiscal year. (In June, the company hired former Loewe SA creative chief Stuart Vevers as its new executive creative director to succeed Krakoff, who has served as Coach's president and executive creative director for 16 years.)
The company also announced the following executive appointments:
David Duplantis, executive VP digital marketing, is taking on the new role as president of global digital and customer experience.
Javan Bunch, senior VP of licensing will assume the expanded role of senior VP and president, North America wholesale and licensed categories, reporting into Todd Kahn, general counsel in his expanded role as executive VP corporate affairs.
Ian Bickley, president, Coach International, is expanding his role to take on responsibility to include all international direct retail businesses as president, international group.
Stephanie Stahl, currently senior VP strategy and consumer insights, is taking on an expanded role as executive VP marketing and strategy.
“Our management team is among the best in global retail, and we’re very fortunate to have a deep bench of truly exceptional talent,” said Victor Luis, president and chief commercial officer of Coach, who is set to take the reins from longtime Coach CEO Lew Frankfort in January. “We’re confident that this new organizational structure – with an intensified focus on our North American business – comprised of proven Coach leaders, will successfully drive Coach’s transformation strategy.”
For the full year, Coach’s net sales rose 7% to $5.08 billion from $4.76 billion the prior fiscal year while net income excluding unusual items increased 3% to $1.07 billion from $1.04 billion. Same-store sales rose 5.7%.