News-wire from multiple sources on retailing and Coach Inc.

“The company had forecast second-quarter sales would rise to about $1.05 billion. Analysts surveyed by FactSet Research estimated 75 cents a share on revenue of $1.05 billion. Coach also said it won't provide per-share guidance for the second half of the year in light of the uncertain environment. Coach will release final results on Jan. 21.”

“North American comparable-store sales declined 13%. That would be the first negative same-store sales Coach reported since the first quarter 2002, according to Credit Suisse analyst Paul Lejuez. Lejuez estimated negative same-store sales for the remainder of fiscal 2009 and 2010. He projected sales at stores open at least a year could drop as much as 24% in the third quarter and as much as 25% in the fourth quarter.”

"With the holiday season over, in this environment, we question what will drive consumers to shop at the mall," Lejuez said. "While this is an issue facing most mall-based retailers, we view Coach as particularly at risk because its products are higher ticket and more discretionary."


Store Change *
Abercrombie & Fitch - 24%
Costco - 4
Gap - 14
Macy's - 4
Neiman Marcus - 27.5
Nordstrom - 10.6
Saks - 19.8
Sears - 7.8
Target - 4.1
TJX Cos. - 5
Wal-Mart + 1.7
* Compares sales at stores open at least a year with December 2008

“TABLE-U.S. Dec ICSC retail sales down 1.7 pct vs year ago”
http://uk.reuters.com/article/marketsNewsUS/idUKNYC00122720090108

“ICSC Chain Store Sales Index Year/Year % Change”
http://holiday.icsc.org/2008/hw08_06chain_store_sales_index.pdf

“ISIC Traditional” Holiday Season Spending”
http://holiday.icsc.org/2008/hw08_05traditional_season_spending.pdf

Fun Facts:
The average number of gifts wrapped per mall for the 2006 holiday season was: 2,640
The average number of gifts wrapped per mall for the 2007 holiday season was: 1,050

Conclusion:

It’s interesting to note we have a shorter holiday shopping season in 2008 (27 days) as oppose to 2005-2007 (30, 31, 32 days). Coupled with bad snow storm across the North American continent, the retail sale decrease is dire, but consumer spending is not the only factor. Coach’s outlook is worrisome on how it will balance between sale and promotion going forward. However, Coach is still bringing in substantial cash-flow with little debts to worry.