--Coach announces succession plan
--International chief to become CEO next year
--Transition comes at critical time for company
(Adds further context and comments from analyst)
By Karen Talley and Melodie Warner
Coach Inc. (COH) unveiled its succession plan for Chairman and
Chief Executive Lew Frankfort amid broader restructuring efforts to
become known for more than just handbags.
The company named Victor Luis president and chief commercial
officer and said Mr. Luis will become CEO in January 2014. Mr.
Frankfort, a 35-year veteran of Coach, will then become executive
chairman of the luxury handbag and accessories maker.
Mr. Luis, a veteran of Coach's robust international operations,
will be taking the reins at a critical time for the company.
Competitors like Michael Kors Holdings Ltd. (KORS) and Tory
Burch "feature a broader and more robust fashion platform than
Coach, which is still too bag-centric," said Craig Johnson,
president of Customer Growth Partners.
Coach has said it aims to expand into clothing and other areas,
"transforming (the company) into a global lifestyle brand."
Coach also "suffers in part due to its ubiquity," Mr. Johnson
said. "Part of the magic of luxury is the value of scarcity, and
since Coach is in virtually every A and B mall and every outlet
mall in the country, it has become too ubiquitous."
Mr. Luis joined Coach in 2006 as president and chief executive
of Coach Japan and became president of the Coach International
Group in February 2012, where he had oversight of all of Coach's
businesses outside North America.
Coach's North American same-store sales declined for the first
time in three years in the most recent quarter, while international
sales increased sharply.
Competition and promotions intensified in women's bags and
accessories, especially in the weeks leading up to Christmas.
Analysts said competition from the likes of Michael Kors, which has
posted surging sales, Kate Spade and Tory Burch was dogging the
company.
Coach has made sales in China the cornerstone of its
international strategy and Coach said Thursday Mr. Luis has
spearheaded its growth in Asia.
Coach shares were off 0.4% to $48.57 in recent trading. The
stock has fallen 36% over the past year.
Write to Karen Talley at karen.talley@dowjones.com and Melodie
Warner at Melodie.Warner@dowjones.com
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