Coach Cuts 150 Employees As Part Of Larger Cost-Paring Move

Coach Inc. (COH) has laid off more than 150 corporate employees as part of a larger effort to moderate costs as the economy shows scant signs of improving.

The leather-goods retailer said the reduction amounts to a bit over 10% of its U.S. corporate staff of roughly 1,500.

The cuts are across all levels and U.S. business units, Coach spokeswoman Andrea Shaw Resnick said.

This is first time Coach has reduced staff during the current recession, and Resnick declined to say whether additional layoffs are planned.

"There is no further detail at this time," she said.

Citing a "uniquely challenging operating environment, we have taken steps to significantly reduce our expense structure," Resnick said.

Aside from the staff reductions, Coach is deferring "substantial investment" in technology projects and eliminating merit-based wage increases, the company said in a statement.

Coach has telegraphed that it, like most other retailers, is experiencing difficulties.

The company late last month posted a 14% drop for the quarter ended Dec. 27 and said it planned to slow its rate of store expansion to about 20 stores a year, compared with 40 previously, until the economy improves.

Coach also has begun offering its iconic handbags at lower prices.

Trying to appeal to a much more price-sensitive consumer, Coach is reducing prices 10% to 15% for handbags and small leather goods.

The goal is to sell handbags below $300 by working with vendors to produce the same quality but bring down costs.

For Coach, bags and leather goods account for about 85% of annual revenue.

Coach sells through its own stores as well as department stores ranging from Saks Inc. (SKS) and Nordstrom Inc. (JWN) to Dillard's Inc. (DDS) and Macy's Inc. (M).

Coach shares were last down 65 cents, or 4.6%, to $13.62.

-By Karen Talley; Dow Jones Newswires; [e-mail]; 201-938-5106