Coach says it”s targeting different segments than Michael Kors, but now analysts are calling out that claim.
Corinna Freedman, an analyst at Wedbush, writes in a note to clients that Coach is getting ideas from the Michael Kors Outlet playbook.
For instance, it”s layering in higher-priced merchandised in order to create a “pricing halo,” as Michael Kors Outlet does. Coach is also presenting its products in similar ways, according to the note.
Freedman writes that it “highlights the increased competition between the two for customers.”
She used an example from Macy”s Herald Square location. At the store”s new revamped designer handbag section, Michael Kors Outlet and Coach are in extremely close proximity to each other.
From her note (emphasis ours):
“Following the earnings call, we took a walk over to the new Macy’s Herald Square to check out Coach’s new space in the recently renovated main handbag department of Macy’s Herald Square. We were struck first by the proximity of the KORS and COH spaces – directly competing with each other for eyeballs and foot traffic.
It is clear to us that the two brands are indeed direct competitors, despite Coach’s claims that the two are targeting different customer segments.”
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