Coach: Multichannel And E-Mail Comments From Management

Here's a few tidbits from the recent Coach investor conference call.

• Gross Margins are around 74%. Do you understand the gravity of that number? A handbag costs them $100, then they sell the handbag for $399. That's how you generate profit, folks!
  

• Only 11% of sales happen in Department Stores.

• "... and what we are seeing is a huge opportunity around segmentation and customization which will begin to effort against this holiday. So you will see us doing a more tailored approach around e-mail. In terms of open rates and e-mail response rates, we are disciplined there. We do not bombard people with a lot of e-mails if they choose not to engage, so we control that carefully. Our e-mail productivity is strong."

• "While e-mail can be an effective way to get a lot of messaging out there because it is virtually free from a cost standpoint, we are not going to use that irresponsibly. We are careful to not bombard consumers with email messaging that we believe to be intrusive. It is not an enormous piece of our overall online business, but it is an important messaging tactic for us. We are optimistic about engagement and open rates within Coach.com."

• New Coach retail stores average $2.0 to $2.1 million in net sales, annually.

• Jennifer Black asked if the customer still buys four or five handbags a year as she did a while back, and was told that the trends have not fundamentally changed. Wow! That's some handbag mojo, folks!