Coach is Most Clutch Among Luxury Leaders

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tdp2664 InvestorPlace Tiffany (NYSE: TIF ), Ralph Lauren (NYSE: RL ) and Coach (NYSE: COH ) all registered great performances in the first half of 2011. But with the U.S. economy growing at less than 1% and 14 million people out of work, how could that be? A quick look at these luxury goods purveyors reveals that things never have been better for their American businesses. And wealthy Americans aren’t the only ones willing to spend — the rich around the world are gladly grabbing up these luxury brands. Just take a look at Tiffany. Its value has tripled since 2009, and now that it has ended a joint venture with Swiss watch retailer Swatch, Tiffany could be a takeover target. Since June 2009, Tiffany’s value has grown from about $3 billion to $8.6 billion, and it’s expected to enjoy 30% revenue growth in the next few years as it continues to expand in Asia and Europe. Third Asset Management, a New York money manager, estimates that Tiffany could be sold for as much as $12 billion as it enjoys a growing share of China’s emerging affluent. Meanwhile, Ralph Lauren also is enjoying strong growth in Europe and Asia. One analyst expects Ralph Lauren to get 60% of its growth from these markets in the future. By spending $500 million in capital expenditures for its expansion in these markets, Ralph Lauren will get a bigger share of the high-rent consumers in these areas, and if it can keep its prices up, it will enjoy a bottom-line boost, partially on a 50% drop in cotton prices. Coach’s leather handbags are enjoying a spurt in global demand. In the past 12 months, its sales have grown 15% on 20% net income growth — yielding fantastic 21% profit margins. Coach seems to be enjoying not only growth in China and other East Asian markets, but also improved sales and profits in the U.S. As CEO Lew Frankfort pointed out after Coach reported its fiscal 2011 results in early August, North American revenues were up 17% thanks to market share gains, higher productivity and distribution expansion. Finally, Coach is benefiting from new men's products and its digital strategies. These consumer goods companies are attracting newly affluent consumers around the world who are willing to pay a price premium for what they perceive as prestigious American brands. Tapping that hunger for the accoutrements of success is boosting their growth, but does this mean all three companies are good investments? Here’s a quick breakdown of the three luxury retailers: Coach: Very profitable company,