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Here are a few questions about Coach, with ambiguous answers:

Yes. Its handbags come with a quality and price tag (several hundred to over a thousand dollars) that fake Michael Kors put them in the category of luxury for most consumers. It has “full price stores” in prime locations such as New York’s Fifth Avenue. Coach offers accessible luxury at a price point where the European luxury players cannot compete effectively.

No. Coach’s pricing is far below that of European luxury names like Herm Bulgari or Louis Vuitton. Coach derives two thirds of its North American sales from lower priced sales at factory outlets. That is nearly half of total sales, a percentage that is too high for a true luxury company.

In addition, Coach runs too many discounted sales for a luxury company. Between Michael Kors outlet Thanksgiving Week and the end of the year, I counted no fewer than a dozen discounted sales on Coach’s Twitter account. (Side note: It is not clear why Coach advertises some of its discount sales as “Semi Annual”. This practice encourages some customers to just wait a few months for better prices).

Will Coach be a growing company again?Yes. The company is seeing rapid growth in its men’s line and in international sales, most notably in China. International comps will improve in 2014 as the yen’s near 30% decline phases out gradually. An acceleration in the US recovery will help North American sales rise again.

No. North America sales are in decline due to structural, not cyclical, reasons, in particular the aging of Coach’s customer demographic.

Does Coach have a strong management team?

Yes. Coach is highly profitable, generates strong cash flow and has no Michael Kors handbags debt. Management has taken decisive steps to develop new revenue streams. For example, the men’s line now accounts for over 10% of total sales. And sales in China are booming.

No. Coach was too slow to develop a foreign presence. In North America, an overreliance on factory outlets has damaged the brand. And the effort to transform Coach into a broader lifestyle brand raises its risk profile since it is no longer just “sticking to its knitting”.