The analyst noted that there was strong demand for Coach’s higher-priced 1941 collection and sell-outs with the Disney + Coach collaboration. He also found that search traffic on Google rose by 4 percent sequentially. Altschwager wrote, “Historical search data in the U.S. has a 90 percent correlation with Coach’s North American comps.” The traffic acceleration coincided with the Disney + Coach 1941 collection launch.
In a new consumer handbag survey, Baird asked 500 women in June about their intentions to buy a new purse and Coach fared the best among the big accessory brands. Coach stock jumped more than 2 percent to $43.34 on news of the upgrade and survey results. The survey answers were a mixed bag for Michael Kors Holdings Ltd., Kate Spade & Co., Vera Bradley Inc. and Tory Burch LLC.
Forty-three percent of women said yes when asked whether they intended to buy a purse in the next three to six months. Sequentially, it was a big gain over the 14 percent who said yes when they were asked the same question in April. But it was a slight drop from last year’s 44 percent who said they were going to buy a bag.
In the two and a half years that Baird has been running the survey, this is the first time shoppers answered favorably when asked if they were planning to buy a Coach bag. Handbag shoppers were also feeling more positive about their intentions to buy a Vera Bradley bag. Although the number is still lower than last year, it showed sequential improvement from April.
Michael Kors was flat from last year and the intent to purchase has declined since April. Kate Spade was higher than last year, but seems to be losing steam as the year progresses. Tory Burch also saw declines from shoppers intending to buy.
Kors stock was unfazed and gained 1.5 percent to trade at $52.40 and Kate Spade was up 1 percent to $21.32. Vera Bradley was also moving higher by 13 cents to sell at $14.74. Tory Burch is a private company.
Shoppers also picked outlet stores as the place they were most likely to buy a new bag, followed by department stores. Since Coach has a big outlet store presence Altschwager believes this will be positive for their sales. But it should be noted that outlet malls are sensitive to tourism and have been affected by the continued strength of the dollar. Brand stores were third on the list and Amazon came in fourth.
The shoppers, though, picked department stores over outlet malls when asked where they liked to shop. 36 percent said they prefer shopping at a department store, while 31 percent like the outlet stores. Brand stores and Amazon.com were tied with 18 percent choosing those options.