Article - Is Coach becoming too popular?

  1. Very interesting. I never realized that Gap was ever considered exclusive - I always saw them everywhere.

    I think that Coach is already doing thing to try to avoid losing its pretige with the legacy stores and more limited edition items. I'm also thinking back to the article someone posted (perhaps you!) called something like "Coach's Split Personality" or something like that which discussed how Coach tries to avoid the pitfalls of the discount business that other designers, like CK, fell into by offering only out of season, outlet only, etc. bags at the outlets.

    It will be interesting to see what happens. I wonder how much ubiquity will really hurt them since they're already a brand known for "affordable luxury."
     
  2. Wow,

    I kind of agree though, if COACH becomes ubiquitous it loses appeal. It'snice to have COACH buddies, but not if it means your bag starts looking more and more accessible/ordinary.
     
  3. i can't see the article! :sad:

    but i think that 'popularity' and 'availablity' is a very tricky thing. just like a business cycle no company can enjoy continuous profits without peaking or having a 'down' cycle.

    let's just hope that Coach isn't going to be like Gap and not get itself out of a rut should there be one.

    It's a tricky thing, consumers and perspective. I've never thought of Coach as a higher end and I never really thought they'd ever be able to make that transition but who knows.

    I am occasionally wrong ;) :lol:
     
  4. Very interesting, I think it's true if everyone is wearing COACH there's nothing real special about it. And what hurts it the most are the Outlets. Makes me think twice about paying full price for a bag, when it will go to the outlet in a few months for half or more off the original price.:shrugs:
     
  5. Thanks for posting the article, it's very interesting. For me, I also hesitate, and keep on hesitating paying full price because of the outlets and sales. I thought it was interesting also that they compared it to Calvin Klein which I remember it being quite high end in the beginning and then I'm always finding it on sale or at the outlets. I also thought it was interesting how Tiffany's raised their prices of their silver line so it would be more upscale. I wonder if that's why other brands have constant price increases. Hopefully, though, Coach will keep their image and quality of their bags up.
     
  6. Coach has quite a few expensive bags now, at least they seem to cost alot more than I remember them costing.
    I always pay full price because I always tend to like the bag that doesn't show up at the outlets or gets sold out, so I have only bought one bag there, my black leather soho flap.
     
  7. i think they more expensive bags and legacy line could keep most coach exclusive. i really dont want them to end up like gap. but i will be true to them even if they do.
     
  8. As popular as Coach is, I very rarely see anyone carrying "my" bags - and I live in the DC area, where there are plenty of Coach boutiques and outlets nearby. I'd hate to see Coach take a fall like the Gap - but think if they keep their quality up that won't happen. I've definitely noticed a dramatic decline in the Gap's quality and style over the last few years.
     
  9. i can't see the article either...

    but going with what allieann said, i never see people with MY bag. i've never seen anybody else with a legacy piece. never seen anyone else with the carryall i have, or anything else. at most i see demis and wristlets.

    it's popular, yes. it's affordable and that's why. and there seriously aren't a whole bunch of people who know about the outlets...and the most popular bags don't usually make it there...so...
     
  10. Here is the article for those that the link is not working, I found it on MSN money yesterday and thought it would be of interest: Is Coach becoming too popular?The handbag retailer is thriving as a peddler of accessible luxury, but rapid expansion could undermine its tony image.Coach, a maker and retailer of stylish handbags, just had a blowout season. For its fiscal second quarter, sales at stores open at least a year soared 25.7%, leading to a 31% increase in profit. Coach CEO Lew Frankfort was so keyed up by these results that he boosted the number of stores the company will open this year by 10, to 40. "The Coach brand has never been more vibrant," says Frankfort. But is Frankfort having a bout of irrational exuberance? Clearly, Coach (COH, news, msgs) has recorded some of the best growth numbers of any retailer or accessories maker in recent years. As Frankfort pointed out in a conference call with analysts, Coach has achieved double-digit sales growth since 2001 in each holiday quarter, for a five-year compounded annual growth rate of 29%. "We've never been more excited about the potential for the Coach brand," he says. Video: Frankfort on Coach's earningsAnd why not? Economic signs are pretty good, too. Consumer confidence as tracked by the University of Michigan is up sharply for January, and the Labor Department reported that the unemployment rate is at a five-year low of 4.5%. That's clearly a nice setting for expansion. Problem is, it reminds some of a similar setting in the late 1990s when the economy was roaring and The Gap (GPS, news, msgs) was the quintessential retail success story, posting month after month of same-store sales increases. Its stock had risen 122% between 1998 and 1999, and it had increased the number of its stores by 12%, with plans of upping that to 20%. The Gap could do no wrong.Dorothy Lakner, at that time an investment analyst at CIBC Oppenheimer, hailed The Gap: "They've got the momentum in their favor." Karen Sack of Standard & Poor's was so upbeat that she believed the retailer could recover from any mistakes because "they don't sit still, so you have confidence that they'll think through it and bounce back, and that's what's important." Anyone in the retail world today knows that plastering the world with Gap stores was the beginning of myriad problems. The Gap look became so ubiquitous that it lost its specialness. In just two years, it started posting sales declines. By 2002, it lost its legendary CEO, Millard "Mickey" Drexler. On Monday, the company fired its replacement CEO, former Walt Disney (DIS, news, msgs) executive Paul Pressler."Ubiquity can be the death of a brand," says Robert Passikoff, the CEO of Brand Keys, a New York brand consultancy. "You need to be very careful when you expand." Bottoms-up growth Coach beat Wall Street analysts' estimates in its fiscal second quarter, with overall revenue climbing 29% to $836.4 million and profit rising 31% to $227.5 million. However, a close look at the sales numbers reveals that the gains came mostly from its bargain stores: Sales at the retailer's factory stores, where Coach sells the previous season's bags or irregular leather goods from its factories at a discount, were up 33.4%, while its retail-store sales were up 20.8%. Wall Street investors too were a bit worried. Despite the stellar earnings numbers, Coach's shares fell 7 cents to $43.91. Stock Charts (Year)CoachRetail investors remember how Calvin Klein and Tommy Hilfiger lost the shine on their images when they flooded the discount market. Image is clearly an issue among upscale brands. Tiffany (TIF, news, msgs), for instance, decided to increase the price on its popular silver jewelry items, fearing that huge sales would tarnish its upscale image.Coach, of course, is known for quality craftsmanship and high design. In recent years, it has also introduced purses that are more affordable and priced under $200, and even under $100 in its factory outlets. These steps have clearly attracted a new set of middle-income buyers who previously didn't shop at Coach, and some fear the brand might lose its cachet if its reach extends too far. "There's always the danger of overextending yourself," Passikoff says.So far, though, Coach has proved naysayers wrong as it hews to its unprecedented growth path. Patricia Pao, the founder of New York retail consultancy The Pao Principle, believes Coach will not falter in its expansion plans because the company's moves are market-research-driven, well-planned and well-executed. "They really know the game of building a brand, creating customer experience and introducing goods that keep customers coming into the store on a daily or weekly basis," Pao says. This article was reported and written by Pallavi Gogoi for BusinessWeek.
     
  11. I think a lot of brands and designers will have to see how they fare when and if there is ever a downturn in accessory purchases in general. Right now we are seeing more people interested in handbags than ever before, and more people reaching for what was previously out of reach. That often begins with Coach.

    But if for some reason accessory and handbag purchases become less "hot" in the next few years, then the fate of Coach and a lot of other brands/designers will be up in the air. They will have had to have kept their customer base and not have somehow sold out their image or burned it out by becoming omnipresent. It is a tricky line to walk, being "affordable luxury" since the very term is often an oxymoron.
     
  12. The popularity of a product never deterred me from liking it or not purchasing it if I love it. Whether Coach will oversaturate the market or not, as long as they keep making what I like....I'll buy.
     
  13. I shuddered when they compared the possibility of Coach's future to that of the Tommy or Calvin Klein lines. I think Coach has an extensive enough selection of bags and accessories in varying price ranges to keep it exclusive enough. I don't think that opening additional stores will make their prevalence so common though, because if middle-class consumers weren't spending $100+ on Coach items before, then it doesnt mean they absolutely will start spending that much in the future. We'll just have to wait and see, and hope that our Exclusive pieces don't become as commonplace as the fake LV bags you see everywhere.
     
  14. I think it sucks when people stop liking something just because a lot of people have it. I like what I like, regardless of the influence of others. If people keep letting others dictate their tastes to them, then everyone will end up looking exactly the same eventually.

    I dunno, it really irritates me when people are down on Coach just because a lot of people have it. God forbid a designer brand make something that normal people can afford. How awful, it must be the end of the world.

    *jumping off the bitterness train now*