When I see a Coach-branded black stick umbrella selling for $148, and folding umbrellas for $88, I can't help whether they'd keep me any drier than my $10 Totes model does. And now Coach is selling dog leashes and collars for $78 each. What will it come up with next? The Coach brand name is very powerful, but when the company slaps it on so many things, it risks diluting that potency.
I think it's important for companies to keep seeking growth opportunities. They must never be satisfied with the status quo, no matter how good things are going. But it's also important for a firm to keep its core customers happy. Deckers Outdoor's
Coach has certainly had a great run. I'm not saying things are about to become unhinged. But at 30 times trailing earnings, the leather goods firm's expectations are high. I wonder whether it's being set up for a fall.
For more on the first-class product maker, check out:
Fool contributor Larry Rothman is happy to receive feedback, and promises to read it when not being wrestled by his three children. Feel free to email him at email@example.com. He doesn't have any positions in the companies mentioned. The Fool's disclosure policy is priceless.