Coach Responds To Falling Profits By Offering Pricier Handbags

bagshoppingThere’s a limited number of women who are interested in spending between $200 and $400 for a purse, and that market is becoming more crowded. What’s a company like Coach to do in the face of falling sales and falling profits? Sell more expensive bags targeted at more affluent customers, of course.

According to a recent report in Bloomberg Businessweek, the company faces lots of competition in the shallow end of the designer handbag pool, with companies like Kate Spade and Michael Kors beginning to zip up more of that market. One bright spot for the company has been the higher end of its offerings, totes that cost $1,000 or more.

Wait, though–isn’t that the price territory of the big, famous luxury names like Louis Vuitton? Not anymore. According to one analysis by Barclays, companies that once sold bags in the $600 to $1,200 range are aiming even higher. That leaves an opening for Coach.

The company is saying “meh” to most of the middle class in other ways, too: it will offer fewer items in discount sale channels, including flash sale websites and the company’s own brief, glorious sales.

Coach Responds to Falling Sales By Raising Prices [Bloomberg Businessweek]

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