Coach Ramps Up Japan Growth

NEW YORK CITY-Coach Inc. is already known as a significant retail success story in a notoriously hard market to crack, Japan, but it has no plans to coast. In fact, the company unveiled plans this week to open at least 10 new stores a year in the country over the next few years, including new flagships, retail standalones, and store-within-stores. It expects Japanese sales of Coach products to more than double by 2009 to over 80 billion yen (about $740 million).

Currently, the company has more than 100 retail outlets around the country. “We believe that through expansion and increased productivity, we can grow at least 20% annually in constant currency, doubling our sales base over the next four years and taking our market share to our goal of 15%, from about 8% today,” says Lew Frankfort, chairman and CEO of Coach. “We now believe we could have at least 130 retail locations throughout Japan, including at least 15 flagship locations, more than double the current number.”

Coach entered the Japanese market only in 1988, selling its bags at Mitsukoshi, a major Japanese department store. Later it added freestanding retail stores, and in 2001 it established Coach Japan Inc. and acquired PDC, the Mitsukoshi subsidiary that had distributed Coach products in Japan. Since then, sales have been on a fast upward track, growing over the past three years to about 30 billion yen ($280 million).