Luxe brands open shop, flee department stores; Lauren, Guess gain more control, payoff in retail vs. wholesale.(marketing of Coach Inc.)(sales and earnings so Polo Ralph Lauren Corp.)

Advertising Age, July, 2005 by Frazier, Mya

Byline: MYA FRAZIER

The blue suede Coach bag is stuffed on a clearance table with the markdown price of $88.90, a steal compared to the original price of $178. Nearby is a section of glass shelving stocked full of Coach purses, including a $328 pink suede satchel.

Leave Nordstrom's, however, and just three stores over Coach bags priced over $400 are displayed like museum pieces. It's a world where a friendly and immaculately dressed sales staff always greets you, the music is always just right and absolutely nothing ever goes on sale.

The contrast explains, in part, why in a little less than five years, Coach has cut its dependence on the department store channel-down today to 11% of its $1.6 billion in sales from 15% in 2000-to build its...

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