Coach, the US accessories brand, is planning to shift up to half of its manufacturing out of China to escape rising labour costs at the same time as it moves aggressively to expand its sales in the country.
Lew Frankfort, Coach’s chief executive, said that over the next five years the company would cut its China production to 40-50 per cent of its total from 85 per cent at present by opening factories in lower-wage economies including India, Vietnam and the Philippines.
Coach’s plans point to the shift in China’s role from workshop of the world to consumer of first resort. Coach is aiming to make annual sales of $500m in China within the next three years.