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Coach, Inc. Message Board

  • schneckden schneckden Oct 27, 2010 11:44 AM Flag

    COH's sales mix.

    got off the red eye from vegas this morning and doubled my COH short at 49.5 on the dime. glad to see the company buying back 3mn shares on top of 10mn shares last qtr. are frankfort's RPSU's vesting or something ? these buybacks will look awful in due time but tucci has to be happy with his 143k stock units and 200k 10 year stock options struck at like $26 (yip 10 year options with no cost of capital bumps). anyone think krakoff is complaining with COH paying an absurd price for the "krakoff brand". what? you don't know this brand? well you are paying dearly for it - i love these "usage" payments. As per the 10k - For each Fiscal Year during which Reed Krakoff is employed by Coach, Reed Krakoff will be entitled to a payment (a “Usage Payment”) for each Fiscal Year during which Coach operates the Reed Krakoff Brand in an amount equal to the Pre-Usage Payment MOI for such Fiscal Year times the Usage Percentage; provided that MOI ( i.e. , after the accrual of such Usage Payment) equals or exceeds twenty (20) million US Dollars. that's right. 20mn a year with an upside kicker and the price goes up every year. so he got growth priced in from COH but COH doesn't get the same in its stock options with mgmt. this isn't stuff that makes me short a stock but it does get me fired up. so did you guys notice the sales mix qoq. indirect sales up nicely. too bad COH has marginalized the dept stores by opening stores a few doors down. and direct sales???? fell off a cliff. lovely. looks like the 20mn a store charade could pay off sooner than i hoped. while the dept stores invested for growth, invested wisely in new designers, COH bot back stock at ludicrous prices. i've seen this a MILLION TIMES. whether is was redstone at VIA or the biggest crook steve wynn over at WYNN, these insiders tend to be terrible buyers of their own stock. COH should just buy the SPX.

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