The number of Coach (
) stores has increased from 396 in 2005 to around 700 in 2010
through the opening of new stores and expansion of existing
facilities in North America, as well as in international markets
like Japan and China. We expect a steady increase in the number of
Coach stores as the company attracts more customers to its
affordable luxury handbags and accessories. However, the rate of
store growth will likely slow down in the coming years as the
company concentrates more on expanding its existing stores.
Coach mainly competes with premium apparel and accessories
players like Polo Ralph Lauren (
), Liz Claiborne (
), and AnnTaylor (
), as well as high-end brands like Louis Vuitton, Hermes,
Gucci and Prada.
While we expect Coach's store count will cross 980 by the end of
our forecast period, Trefis members anticipate the store count will
reach 1,200, suggesting potential upside of 17% to our price
estimate for Coach's stock.
We currently have a
price estimate of $57.04 for Coach's stock
, in line with the current market price.
China to Drive Total Square Footage
Coach acquired the distribution business in China from ImagineX
group in 2009, adding 37 Coach China stores to its list of
Coach's retail and factory square footage has grown at an
average annualized rate of over 15% in both North America and
Japan. We expect these regions will continue to see growth, however
at a slower rate due to maturation of the luxury market in these
In comparison, Coach's square footage in China has increased at
an annualized rate of 88% from 2005 to 2009. With proposed 50%
growth in square footage in China for 2010, Coach's growth plans
for the region remain aggressive.
Growth Outlook for New Store Openings
The average square footage per Coach store increased in all
geographies during the period from 2005 to 2009. Coach will likely
continue to concentrate on expanding existing stores to offer a
better assortment of products to consumers. This may result in
fewer store openings in the future.
See our full analysis and $57.04 price
estimate for Coach
Trefis Community Forecast
Trefis members expect the number of coach stores to increase
from 656 in 2009 to 1,201 by the end of our forecast period,
compared to the baseline Trefis estimate of an increase to 984
during the same period. The member estimates imply an upside of 17%
price estimate for Coach's stock.