Much like its fellow luxury retail brands, Coach has been trying to turn around its struggling business in recent years. Today, the company said its efforts have actually paid off, and that sales are picking up. But despite that, Coach says it’s time to cut loose about 25% of its department store locations in North America, so it can continue to climb its way back up the retail ladder.

Coach said sales at its existing North American stores went up at the best rate in the four years during its latest quarter, The Wall Street Journal reports: sales at North American stores last year — not including newly opened or recently closed locations — rose 2%. However, total sales still fell short of expectations.

A few months ago CEO Victor Luis said the company’s efforts to revamp its image, upgrade stores, and cut down on promotions were producing results. The company has also announced layoffs recently.

In a move similar to fellow handbag company Kate Spade, Coach wants to focus less on promotional sales at departments stores, also known as wholesale locations, and more on selling items at full price. As part of that plan to polish its upscale image, Coach says it will close about 250 of its 1,000 North American department store locations, TheStreet reports.

The locations that are closing are more likely to be low volume, Coach explains, and the closings will be scattered throughout the region. Coach will pay more attention to the-best performing locations, and less to stores that mark down its bags or hold big clearance sales.

“These moves are really meant to reduce the smallest doors that we have, and to ensure in the doors that we do remain that our brand is going to be first and foremost managed effectively and not have our pricing be overly promotional, which impacts not only consumer perception about the brand but also creates confusion across the various channels,” Luis told TheStreet.

He adds that the company hasn’t given up on department stores yet, but now is the time to protect the brand with an eye on the long-term.

Coach, in Turnaround Mode, Reports Sales Growth [The Wall Street Journal]
Coach CEO to Department Stores: We Are Taking Back Our Brand [TheStreet]

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