NEW YORK — Coach Inc. on Tuesday joined the growing list of fashion firms cutting jobs, revealing plans to lay off 10 percent of its U.S. corporate staff.
This story first appeared in the February 25, 2009 issue of WWD. Subscribe Today.
Responding to speculation in the market, Coach on Tuesday issued a statement to WWD saying, “In light of the uniquely challenging operating environment, we have taken steps to significantly reduce our expense structure. These actions include a 10 percent reduction in U.S. corporate staffing levels, the deferral of substantial investment in technology projects and the elimination of merit-based wage increases, in addition to the previously announced measures of slowing domestic retail store openings and suspending expansion activity in this channel.”
Coach employs about 1,500 people in its U.S. corporate operations.
No further details were available Tuesday. Coach said it will give additional information on the layoffs and other cost-cutting measures during its earnings call in April.
The cuts coincide with other strategic moves by the company to control costs in light of the recession. Last month, Coach revealed plans to slow store openings and focus on more moderately priced products as it reported a 14 percent drop in second-quarter earnings to $216.9 million, or 67 cents a share, from $252.3 million, or 69 cents, in the previous year. Sales in the quarter ended Dec. 27 fell 1.8 percent to $960.3 million from $978 million.
In discussing the results, Lew Frankfort, Coach’s chairman and chief executive, said the firm would continue its overseas expansion but would slow openings in North America, with only 20 stores planned this year compared with the usual 40. Frankfort later told WWD that the brand’s U.S. business, which worsened during the second quarter, had “stabilized” in January but “at reduced levels.”