Whether the U.S. is technically in a recession or not, Coach’s CEO Lew Frankfort says consumers are already pretending that it’s here. That’s why he’s in favor of the President’s proposed stimulus package—it will “restore confidence in consumers that they will have some additional discretionary money that they would otherwise not expect.” That’s right: we need a nation-wide tax credit this year so that we can buy more Coach purses.
The aspirational upper-middle-class customer who helped companies like Coach and Saks post double-digit growth in the past few years has disappeared due to the current rotten economy, writes BusinessWeek. The result: luxury goods companies that expanded their product lines to appeal to the not-quite-rich now have $150 purses and nobody to buy them. Coach went so far as to offer coupons recently “to drum up sales.”