Coach is showing runway collections now, just like a European luxury house. (Reuters/Suzanne Plunkett)
Coach, the venerable but rather staid American brand best known for its omnipresent leather bags and accessories, wants to become a genuine luxury house—or at least be perceived that way.
The company is in the midst of serious regrouping at the moment. Sales growth has been slowing for more than a decade, and then plummeted last year. Today (August 4), the company reported that its earnings for fiscal 2015 fell 12.8% to about $4.2 billion.
Like its closest American counterpart, Michael Kors, Coach has become pricey yet basic at the same time—the kind of brand people tend to only buy on sale or at outlet stores, rather than at full retail.
Coach’s CEO, Victor Luis, has been working to turn things around. The strategy is basically to present Coach as something more like a European luxury house—the American Louis Vuitton, albeit with far more modest prices.
“Our intention is to create a true Coach house,” Luis said on the company’s earnings call with analysts.
But Coach is still some ways from the stratosphere of high-end goods typically associated with a luxury house. The brand’s main product, its handbags, still run a few hundred dollars—not the few thousand you’d pay for anything by Louis Vuitton. They’re aimed more at the high end of the middle market, or perhaps the low end of luxury—which isn’t actually all that luxurious.
Instead, Coach is basically rebranding. It has been rolling out products by Stuart Vevers, the creative director it hired two years ago, who previously designed for luxury labels including Louis Vuitton, Bottega Veneta, and Givenchy.
It also wants to emphasize its craftsmanship and heritage as “the original American house of leather,” according to Luis, and it will soon roll out campaigns and events to celebrate that heritage, as it turns 75 next year.
“Our intention is to create a true Coach house,” Luis said on the company’s earnings call with analysts.
But Coach is still some ways from the stratosphere of high-end goods typically associated with a luxury house. The brand’s main product, its handbags, still run a few hundred dollars—not the few thousand you’d pay for anything by Louis Vuitton. They’re aimed more at the high end of the middle market, or perhaps the low end of luxury—which isn’t actually all that luxurious.
Instead, Coach is basically rebranding. It has been rolling out products by Stuart Vevers, the creative director it hired two years ago, who previously designed for luxury labels including Louis Vuitton, Bottega Veneta, and Givenchy.
It also wants to emphasize its craftsmanship and heritage as “the original American house of leather,” according to Luis, and it will soon roll out campaigns and events to celebrate that heritage, as it turns 75 next year.
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