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Women prefer Coach handbags to Michael Kors’, but not the price

Discounts helped Coach during the recession, but are now more of a headache

Women prefer Coach Inc.’s leather handbags to those of its major rivals, but they are less impressed by their lofty price.

That was a key finding of a survey conducted by J.P. Morgan of 500 women between the ages of 22 and 55 who have purchased a handbag in the past year. Coach was selected most as “brand of choice,” but customers displayed low awareness of changes made to the product line to boost growth. In terms of styling and quality, 72% said that Coach’s product was “unchanged.”

Among the women who purchased a bag in the $300 to $500 price range, 72% said Coach bags are overpriced. The brand was likely hurt by the shift by consumers to Factory stores during the recent downturn in search of discounts, and the company may now struggle to persuade them to pay full price, said J.P. Morgan analysts.

“The greatest price pushback (is) Middle America (about 80% at the $75K to $150K income level), confirming qualitative field checks that promotion is needed to spur demand,” they wrote in a note.

Coach was not the only handbag brand to be viewed negatively. Michael Kors came in below Coach with only 12% saying it was their brand of choice, compared with 21% for Coach. A full 77% said Michael Kors’ handbags were overpriced.

Just 10% of those surveyed said Kate Spade was their favorite handbag brand. And rounding out the survey, 6% said Louis Vuitton was their...