boilermaker75 Posted October 23, 2013 Author Share Posted October 23, 2013 I just hope I make as much on COH as my wife and daughter have spent at COH, including gifts they have given me like wallets and belts. Link to comment Share on other sites More sharing options...
CorpRaider Posted October 23, 2013 Share Posted October 23, 2013 You need a $1200 murse. Treat yourself. You've earned it. Link to comment Share on other sites More sharing options...
boilermaker75 Posted October 23, 2013 Author Share Posted October 23, 2013 You need a $1200 murse. Treat yourself. You've earned it. LOL, I had not heard that term. At first I thought it was a typo, but then I goggled it. Link to comment Share on other sites More sharing options...
boilermaker75 Posted October 23, 2013 Author Share Posted October 23, 2013 I took advantage of the stupid downgrades today (stock down after earnings I must downgrade it) to write some October 25, 48-strike puts for $0.40 per share. Link to comment Share on other sites More sharing options...
CorpRaider Posted October 23, 2013 Share Posted October 23, 2013 This is you. http://www.coach.com/online/handbags/Product-coach_billy_reid_warrior_tote_in_alligator-10551-10051-71120-en?cs=mah&catId=5000000000000328823&navCatId=5000000000000265302 Link to comment Share on other sites More sharing options...
LC Posted October 23, 2013 Share Posted October 23, 2013 I feel value guys like us well be the last to know as we are not in the target demo. Exactly. This is the problem with tech & fashion... Link to comment Share on other sites More sharing options...
bathtime Posted October 23, 2013 Share Posted October 23, 2013 According to Betches Love This, Michael Kors is the new Coach: "Completely. Both mall designers. Yuck". http://www.betcheslovethis.com/we-the-betches/article/is-michael-kors-the-new-coach So maybe the way to play this is to, like, short KORS !!!!!!!!!!!!!!!!!!!!!!!!!!!! ;) Link to comment Share on other sites More sharing options...
CorpRaider Posted October 23, 2013 Share Posted October 23, 2013 Yeah, there are those pesky unknowables; but we know they've historically executed at a very high level and mgmt has real skin in the game and leather is "their bag". Lew is bankable. Hoping for about at 8+% FCF yield based on current EV and FCF (in a KORS is awesome world) would get me "excited"; probably need to get it in the low $40s. Even with flat growth in NA they can grow in developing markets and buy back stock and jack up the dividend and I'll be a happy camper. They still grew sales on a constant currency basis and their penetration everywhere other than Japan is barely material. Link to comment Share on other sites More sharing options...
CorpRaider Posted October 23, 2013 Share Posted October 23, 2013 my concern with coach is they will do a krispy kreme Without the accounting "irregularities", right? Link to comment Share on other sites More sharing options...
hyten1 Posted October 24, 2013 Share Posted October 24, 2013 yes, just the over expansion thing my concern with coach is they will do a krispy kreme Without the accounting "irregularities", right? Link to comment Share on other sites More sharing options...
CorpRaider Posted October 24, 2013 Share Posted October 24, 2013 Yeah, I share your concern. It did sound like the NA expansion was only going to be moderate in the upcoming quarter on the call. KKD could be so great if their coffee didn't suck. I wonder what Texas Pacific could do with them. Link to comment Share on other sites More sharing options...
racemize Posted November 8, 2013 Share Posted November 8, 2013 Started looking at this today. Found this bearish article, which seems pretty good. The comments are also quite good. Not sure that it adds a ton to the discussion, as most of the issues have already been identified, but a good summary/write-up. Seems a bit too hard to me, but I'm digging around a bit still. Thanks for all the posts guys! http://seekingalpha.com/article/1764732-coachs-ultimate-problem-is-its-brand Link to comment Share on other sites More sharing options...
gary17 Posted November 8, 2013 Share Posted November 8, 2013 saw this in the mandarin newspaper here in vancouver the other day - the most online searched brands in China according to Baidu the numbers are daily searches Link to comment Share on other sites More sharing options...
racemize Posted November 8, 2013 Share Posted November 8, 2013 So, maybe I'm just totally confused (this is the first time I've looked at purses), but if MK is supposed to be the threat to Coach, why are these purses so cheap? http://www.prettybagoutlet.com/shoulder-bags/bedford.html clearing out old inventory? Link to comment Share on other sites More sharing options...
racemize Posted November 9, 2013 Share Posted November 9, 2013 Ok, stupid question I'm having trouble answering. In North America, coach has a 30% "market share". I cannot find what the market is, e.g., is it luxury purses? purses in general? what? My google fu has failed me, as all the articles only indicate "market share" and not of what market. The 10-K says: A Market Leadership Position With Growing Global Share — Coach is a global leader in premium handbags and accessories. In North America, Coach is the leading brand. In Japan, Coach is the leading imported luxury handbag and accessories brand by units sold. Coach is also gaining traction in China, other Asian markets, Europe, and Latin America. So I presume the market is "premium handbags and accessories", but I would like to confirm. Thanks! Link to comment Share on other sites More sharing options...
Green King Posted November 10, 2013 Share Posted November 10, 2013 So, maybe I'm just totally confused (this is the first time I've looked at purses), but if MK is supposed to be the threat to Coach, why are these purses so cheap? http://www.prettybagoutlet.com/shoulder-bags/bedford.html clearing out old inventory? looks like a fake website Link to comment Share on other sites More sharing options...
racemize Posted November 10, 2013 Share Posted November 10, 2013 So, maybe I'm just totally confused (this is the first time I've looked at purses), but if MK is supposed to be the threat to Coach, why are these purses so cheap? http://www.prettybagoutlet.com/shoulder-bags/bedford.html clearing out old inventory? looks like a fake website Looks like it might be, if scamadvisor can be trusted. A lot of effort on web development for a scam website, but I guess that's how the best ones would work. Link to comment Share on other sites More sharing options...
xtreeq Posted November 10, 2013 Share Posted November 10, 2013 So, maybe I'm just totally confused (this is the first time I've looked at purses), but if MK is supposed to be the threat to Coach, why are these purses so cheap? http://www.prettybagoutlet.com/shoulder-bags/bedford.html clearing out old inventory? looks like a fake website Looks like it might be, if scamadvisor can be trusted. A lot of effort on web development for a scam website, but I guess that's how the best ones would work. Fake. Here's the contact info of the website domain owner: http://www.networksolutions.com/whois/results.jsp?domain=prettybagoutlet.com They're from china, but that doesn't mean they are fake since they say on the about-us page that they "buy overstocks & overuns through the same factories which make for famous companys"... But this does suggest a fake site: The domain was purchased a couple of months ago: Creation Date: 2013-08-29 04:15:26 The admin phone number doesn't make sense: Admin Phone: 13545564654 Admin email is from a free account and not a corporate one: Admin Email: pannai6951@163.com I never trust a site that doesn't have a full address and phone on the contact-us page. http://www.prettybagoutlet.com/contacts/ You can get a full working web store in one day for a couple of hundred dollars today: http://www.prestashop.com/ http://www.shopify.com/ http://www.opencart.com/ http://www.magentocommerce.com/ Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted April 29, 2014 Share Posted April 29, 2014 They reported earnings. http://www.coach.com/online/handbags/genWCM-10551-10051-en-/Coach_US/CompanyInformation/InvestorRelations/IR_PressReleases North American sales decreased 18% to $648 million from $792 million last year. North American direct sales declined 18% for the quarter with a comparable store sales decrease of 21%. China results remained resilient with total sales growing over 25% and comparable store sales rising at a double-digit rate Their drop in same store sales is JC Penney-like. Link to comment Share on other sites More sharing options...
PatientCheetah Posted April 29, 2014 Share Posted April 29, 2014 I think most investors overestimated COH's moat. Despite its long history and the ROIC from the last several years, COH has significant fashion risk. On my last few trips to the malls, Tory Burch seemed to have the longest line outside of its stores. Coach and Kate Spade seemed to be running a lot promotions. Michael Kors was somewhere in between. I believe Tory Burch is privately own. One last observation, most of the Coach customers were Asians, which make sense from its strong China comps. I guess Coach is still a cool brand to the Chinese. Link to comment Share on other sites More sharing options...
PatientCheetah Posted April 29, 2014 Share Posted April 29, 2014 I asked my girlfriend about coach and she tells me that she wouldn't buy their products because the brand has been devalued. Too many teenage girls wear the products. I dont think its a "cool" brand in North America anymore. Can you ask her what she thinks of MK, TB, and KS? Link to comment Share on other sites More sharing options...
siddharth18 Posted April 29, 2014 Share Posted April 29, 2014 One of the lessons I took from this is that a strong historical ROIC does not automatically PROVE that a company has a moat. Sure it's usually true the other way around (deep moated companies usually have strong ROIC). So checking for a strong ROIC is just ONE of the many steps, one needs to take in order to confirm the existence of a moat, not the only step. Also that anticipating fashion trends is a fool's errand. So I wonder who's buying stock in COH today intending to hold it for the long term - are they able to figure out whether the Americans or the Europeans or the Chinese will buy Coach bags, in what amount, 3 years or 5 years from now? Link to comment Share on other sites More sharing options...
CorpRaider Posted April 29, 2014 Share Posted April 29, 2014 A year or two early for any lessons learned for me. I will have to revisit your points on indicia of "moats" at that time. I put on a 1/3 position after the last earnings report @ $26. I'm sure if I bought @ $50 I would be feeling a need for more soul searching. I'm hoping to average down as they transition to new collection, new CEO tanks it to set up favorable comps and they pay the price for new price discipline (e.g. eliminating the online flash sales during the quarter) and re-establish some price signaling for the brand (sales trends are going to suck ("continue to moderate") until Q1 2015, so don't be surprised). They are getting crushed in NA, right now no doubt. + 20% growth on constant currency basis in INTL, even in horrible quarter during business leadership and fashion transition is ok. I can't reach the panic button just yet. They reaffirmed strong support for the divvy on call and as long as they keep growing it that support the price and help calm the nerves. Link to comment Share on other sites More sharing options...
LC Posted April 29, 2014 Share Posted April 29, 2014 I don't like his business. Fashion is fashion...coach is fashion on a large scale which provides spectacular results or spectacular failure. Very risky Link to comment Share on other sites More sharing options...
Palantir Posted April 29, 2014 Share Posted April 29, 2014 Fashion risk isnt as bothersome as the fact that they are devaluing the brand because of their desire to increase volume via discount retail channel. Link to comment Share on other sites More sharing options...
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