Coach Continues Decline In Pre-Market On Raft Of Downgrades

Coach Inc.

shares continued to decline in pre-market trading Friday after a raft of analysts downgraded the company on a weak outlook. The luxury handbag retailer disclosed expectations at a meeting with analysts Thursday, predicting same-store sales to drop to the "mid-to-high" 20 percent range, and continued loss of market share. Itt announced restructuring charges of $250 million to $300 million to close 70 of its stores and update others. The charges are part of a new branding strategy which Coach said is "centered on the concept of defining modern luxury." Measures are to include the near elimination its factory outlet stores and reduced promotional pricing for its products. But analysts were unimpressed. "Coach is a fading brand and re-positioning will take years to play out, " said Morgan Stanley's Kimberly C. Greenberger, who maintained an Under Weight rating but cut her target to $29. Others downgrading or cutting targets included WIlliam Blair, which downgraded to Market Perform from Outperform; Goldman Sachs cut its target to $30; Barclays cut its target to $35, maintaining Equal Weight; Key Corp. cut its target to $46, from $55. BMO downgraded to Market Perform from Outperform. Perhaps the lone remaining bulls are Stifel Nicolaus, which maintains a Buy on the shares, although it cut its target to $47 a share, from $65, and Nomura with a Buy and a target cut to $45, from $50; In pre-market trading Coach changed hands recently at $35.10, down 1.65 percent. The shares closed down 9 percent Thursday.