Luxury handbag maker Coach Inc. said Wednesday it will buy its domestic retail businesses in Hong Kong, Macau and Mainland China from current distributor ImagineX, in a move to directly manage what it sees as a "significant growth opportunity" in the region.
Financial terms were not disclosed. Thibault Villet, Coach president of greater China operations will lead the businesses.
Coach will acquire the assets, including fixtures and inventory, of its current 24 regional stores in stages over the next year. The deal will "slightly" hurt Coach's results in the near term, the New York-based company said.
Also late Wednesday, Coach said it opened its first company-operated store in Hong Kong, a flagship location.
The company believes that by 2013 the China, Hong Kong and Macau premium handbag and accessories market will top $2.5 billion, more than double its current size.
"Our goal is to be one of the top three imported handbag and accessory brands, with sales of over $250 million and a market share of at least 10 percent by fiscal 2013, up from only about $30 million and 3 percent today," Ian Bickley, president of international operations for Coach, said in a statement.
Coach said the company's five travel retail locations in the region will continue to be managed by third-party operators and are not part of this agreement. Under their deal, ImagineX will continue to provide support services in distribution, logistics, human resources, accounting, payroll and information systems following the transition.
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