January 30, 2008, 12:00 AM

Coach uses the web to drive more store traffic

Though web sales are rising, visitors to Coach.com like to see what’s new and then hit the mall, CEO Lew Frankfort told Wall Street analysts on the company’s recent second quarter earnings call.

Coach Inc. continues to be bullish on its Internet channel.

During the company’s recent second quarter earnings call with Wall Street analysts, CEO Lew Frankfort said Coach.com generates online sales as well as increased store traffic.

“Our business online equals on an annual basis all of our visits in store and it’s an enormous number of people,” Frankfort told analysts. “We see the online experience as a direct link to our store experience, and very recent data that we’ve looked at suggests that more and more, the store experience is being pre-shopped by our consumer online.”

He adds: “They’re going online to basically interact with the brand, scout for newness, scout for information and then they’re visiting the stores off of that experience.”

Though Coach, No. 171 in the Internet Retailer Top 500 Guide, doesn’t break out quarterly web sales, the company’s direct-to-consumer revenue in the second quarter rose by 18.4% to $799 million from $675 million in Q2 of fiscal 2007. Overall for the second quarter Coach posted net income of $252 million on net sales of $978 million vs. net income of $214 million on net sales of $806 million in Q2 of fiscal 2007.

“In terms of our online activity, we had a very strong quarter,” Frankfort told analysts.

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