Coach takes full control of European joint-venture created with Pepe Jeans

By

Olivier Guyot

Published
Apr 25, 2013

Coach is taking the reign of its Europen activity. In 2010, Coach joined forces with British menswear brand Hackett, a subsidiary of Pepe Jeans, to create a joint-venture to distribute the Coach brand in the United Kingdom, Ireland, Spain and Portugal. The structure then took control of Coach in France, which was previously handled by department store Printemps. Through the JV, Coach has also opened a store in Germany.

The American brand has no announced that it has bought the remaining 50% from Pepe Jeans to own 100% of the JV which operates 18 points of sale in Europe.

“We are happy to announce that we have come to an agreement with Pepe Jeans to buy their 50% stake in the joint-venture created to allow distrubtion of our brand in the United Kingdom and Europe,” says Victor Luis, president at Coach. The deal is expected to be finalized in July. “We believe that this region has huge potential for the long term both because of the local clientele and because of the number of international tourists that the region attracts.”

The brand has seen a great interest from the influx of Asian tourists. For the third quarter of the 2012/2013 financial year, closed 31st March, Coach posted a revenue increase of 7% to 916 million euros. Operational profit grew 3% to 268 million euro. Activity in North America was up 7% to 610 million euros but even more spectacular results came from Asia.

In China, Coach has over 100 point of sales and said sales have leapt by 40% in the region, with comparable sales showing double-digit growth. Elsewhere in Asia, Coach has 191 points of sale in Japan, seven in Singapore, 27 in Taiwan, 10 in Malaysia and 49 in Korea. Sales outside of North America grew 6% to 294 million euros in the third quarter.

For the American group, conquering Asia is not the only task on the agenda. In 2013, Coach will focus on development in Latin America, Asia-Pacific and the Middle East.