Is The Bad News For Coach Bad News For Luxury?

Coach shares have dropped the most in six-years and the company didn't have much in the way of good news today. The question for luxury watchers is: does it matter? Coach, to many people, is a luxury brand. But it is important to remember that the average price of a handbag (which make up 75 percent of sales) at Coach is 210 euro -- still la fraction of what it is at Gucci (1,000 euro) or even Tod's (980 euro). [Thanks to Redburn Partners Lisa Rachal for the stats.] The question for luxury managers, is: "Will the U.S. credit crunch hurt us and how much?" The question for Coach is: "Has the stock hit bottom yet?" Unlike most luxury brands, Coach decided to push for expansion to second and third cities in the U.S. before expanding globally beyond Asia. For the time being at least, this seems to have been a big mistake.