Lew Frankfort's Competitive Strategies


Code : COM0024

Year :

Industry : Retailing

Region : US

Teaching Note:Available

Structured Assignment :Available

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Introduction:In 2003, 'Coach Inc.' (Coach), the largest retailer of leather accessories in the US, was rated as one of the fastest growing luxury brands in the world with sales of $953.2 million. Since 2000, Coach has been posting an average 12% growth with earnings rising at an average of 72% to clock $146.63 million. For the quarter ended March 2004, the company registered a net income of $58.3 million, an increase of 83% over the same quarter of the previous year and sales increased by 42% to reach $313 million.

Operating margin for the quarter rose by 8.2% to 32.3%. With such impressive statistics, Coach is making waves in the $13 billion global market for high-end leather goods and accessories, which has traditionally been ruled by big players like Louis Vuitton, Hermès, Prada and Gucci.

"The hands-on restructuring engineered by Lewis Frankfort over the last five years is making all those Coach wallets look mighty fat". Observers credited Lew Frankfort, the Chief Executive of Coach, for the rapid growth of the company. "Since 1996—when 'women were walking around with Coach wallets in their Prada hand bags', as Frankfort, 55, puts it—the company has turned itself froma staidmaker of leather handbags into a fashion brand that now sells hip, multistyled bags, clothes, shoes, jewelry and accessories".

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