Coach announces 300 job cuts
Luxury retailer Coach said Tuesday it will cut more than 300 jobs, or 2% of its global workforce, as part of efforts to boost efficiency.
The company said it expects to incur pretax charges of $65 million to $80 million in the current quarter as part of the cost-cutting, which is designed to achieve its goal of a 20% operating margin in fiscal 2017. Coach officials did not specify how many of the layoffs will be in the U.S., or when they will occur. But they said the move will trim 10% of the corporate staff and will not affect workers in stores or factories.
“These actions will allow us to emerge as a brand-led company with fewer layers, larger spans of responsibility in a consistent global voice across merchandising and marketing,” CEO Victor Luis said in a news release.
Coach — which sells outerwear, handbags, leather goods and other accessories — is in the midst of a turnaround following a belt-tightening campaign and store renovations.
The company also reported earnings that beat Wall Street expectations. The company reported net income of $124 million, or 44 cents a share, up from $100 million, or 36 cents a share,in the year-ago period. Analysts expected per-share earnings of 40 cents. Revenue increased 11% to $1.03 billion.
Coach's stock was up 3.6% to $41.63 in afternoon trading.
Coach acquired the Stewart Weitzman brand in the third quarter. Same-store sales in North America were unchanged in the period, continuing a positive trend that has persisted for several quarters. Luis said Coach is on track to post gains in same-store sales in the fourth quarter.
Overall, North American Coach-brand sales increased 1% to $499 million, while international Coach-brand sales increased 5% to $448 million despite the headwinds of a strong dollar and volatile tourist spending.
