What Is The Breakdown Of The Charges Associated With Coach’s Transformation Plan?

March 11th, 2016 by Trefis Team
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COH
Coach

During the fourth quarter of fiscal year ended June 28, 2014 (Fiscal 2014), Coach announced a multi-year strategic plan to transform the brand and reinvigorate growth. This will continue till the end of Fiscal 2016, and includes:

  • Investment in capital improvement in stores and wholesale locations
  • Optimization and streamlining of the organizational model, and closure of underperforming stores in North America and select International stores
  • Realignment of inventory levels and mix to reflect the company’s elevated product strategy and consumer preferences
  • Investment in incremental advertising costs to elevate consumer perception
  • Significant scale-back of promotional activities.

As of December 26, 2015, Coach expects to incur aggregate pre-tax charges of ~$325 million, while the charges up till December 26, 2015 were $303.9 million.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Coach.
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