NEW YORK, May 28, 2008 (BUSINESS WIRE) -- Coach, Inc. (NYSE: COH), a leading American design house of modern luxury accessories today announced that it had completed agreements to acquire the Coach domestic retail businesses in Hong Kong, Macau and Mainland China from its current distributor, the ImagineX group. This acquisition will allow Coach to directly manage the significant growth opportunity with the Chinese consumer by gaining control of its distribution in this region. The agreements provide for a phased buyout of the current Coach retail businesses in Hong Kong, Macau and China over the next year. Thibault Villet, Coach's President, Greater China, will lead the operations of these businesses.

Lew Frankfort, Chairman and Chief Executive Officer of Coach, Inc., said, "We are extremely pleased to announce the acquisition of these businesses. Over the past several years, we have enjoyed an excellent partnership with the ImagineX group. They have been instrumental in the initial development of the Coach brand in this region, including the opening of several important locations in key retail venues in Hong Kong, Beijing and Shanghai. In addition, under the leadership of Mr. Villet, we're now building an on-the-ground team and deepening our insights into the Chinese consumer. This experience, together with our capital strength and international brand recognition, provide a solid foundation for Coach's expansion in the Chinese market. The opening today of our new Hong Kong Global Flagship Store on Queen's Road Central, combined with our agreement to assume direct operation of our retail business in Hong Kong, Macau and mainland China, mark the commencement of the next phase of Coach's growth in this critical region. We are now poised to build the third leg of our business in China, following our successes in North America and Japan."

Ian Bickley, President of International for Coach, added, "Our continuing strong international results reflect the enthusiasm that consumers worldwide have towards Coach's broad and modern product offering and innovative, relevant lifestyle collections. Our business performance demonstrates that Coach has significant potential with this emerging and very important consumer group and reinforces our commitment to expand Coach's presence in this vital market."

"Over the next 5 years, we expect to open over 50 new locations, aggressively growing our sales and market share in this rapidly expanding region. In fact, our market research indicates that by 2013 the China, Hong Kong and Macau premium handbag and accessories market will likely exceed $2.5 billion, more than double its current size of $1.2 billion. 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% by fiscal 2013, up from only about $30 million and 3% today. With the investments we will make in stores, marketing, organization and infrastructure, we're poised to replicate our success formula in Japan since taking control of the business there in 2001."

Coach will acquire the assets, including fixtures and inventory, of its current stores in the region in stages over the next year. While the company expects that this acquisition will be slightly dilutive to Coach's consolidated financial results in the near term, taking control of brand building and distribution at this critical juncture will lay the foundation for a substantial contribution of these businesses in the future.

There are currently 24 Coach domestic retail locations in these three geographies, including our new Queen's Road Central flagship and seven other stores in Hong Kong, one in Macau and 15 in mainland China. In addition, there are five travel retail locations in the region, which will continue to be managed by third-party operators and are not part of this agreement.

Under the agreement reached with Coach, ImagineX, who has acted as Coach's distributor in the region since 2003, will continue to provide support services in areas such as distribution, logistics, Human Resources, accounting, payroll and information systems following the transition. This will allow the Coach team to focus on brand-building and direct management of the front end of the retail business where it directly touches the consumer.

Coach, with headquarters in New York, is a leading American designer of fine accessories and gifts for women and men, including handbags, women's and men's small leathergoods, business cases, weekend and travel accessories, footwear, watches, outerwear, scarves, sunwear, fragrance, jewelry and related accessories. Coach is sold worldwide through Coach stores, select department stores and specialty stores, through the Coach catalog in the U.S. by calling 1-800-223-8647 and through Coach's website at www.coach.com. Coach's shares are traded on the New York Stock Exchange under the symbol COH.

This press release contains forward-looking statements based on management's current expectations. These statements can be identified by the use of forward-looking terminology such as "may," "will," "should," "expect," "intend," "estimate," "are positioned to," "continue," "project," "guidance," "target," "forecast," "anticipated," or comparable terms. Future results may differ materially from management's current expectations, based upon risks and uncertainties such as expected economic trends, the ability to anticipate consumer preferences, the ability to control costs, etc. Please refer to Coach's latest Annual Report on Form 10-K for a complete list of risk factors.

SOURCE:
Coach, Inc.

Coach
Analysts & Media:
Andrea Shaw Resnick, 212-629-2618
SVP Investor Relations & Corporate Communications
aresnick@coach.com
or
Tomomi Iwashina, 81-90-5405-8955
Senior Director, Corporate Communications, Japan & Greater China
tiwashina@coach.com