Coach Is Closing 70 Full Price Stores

[ltbag]

Yes. I will buy as well but NOT at FP. Dont want it or need it that bad. I am conmfortable gettin for less and will continue. I am not a FP payin type gal. Coach will still continue to sell less n I will get at that time.

I totally agree after learning from you over the years cfc. Coach will still need to discount their overproduction.

FOS sales will be cut back to 3 a month from 3 a week, but I bet there will be a lot of deletes in those FOS sales.

As for those that think Coach can suddenly become an upscale brand, I think that they have waited to long to stem the reputation bleeding and that no one will ever consider them a premium designer brand.

And as for competing with Michael Kors and Kate Spade, etc, those brands have numerous sales, are expanding market share not contracting it, and are profitable at the moment, unlike coach which is losing money and has a dropping stock price.

As far as Coach going the way of JC Penney, well only time will tell, but there certainly are similarities in the business plans

 

[iuvcoach]

I don't know too much about the coach tactics they have employed over the last few years, as I haven't purchased a coach handbag in 7 years (just luggage pieces from the men's line). I recently came to this forum after searching for info on the borough. This forum stopped me from purchasing a few of the boroughs I wanted because I had seen that a few people had found them at outlets (even though I know it's rare and that they aren't officially in the outlets). This whole straight to outlet game is a huge factor as to why I haven't looked at coach for years. I purchased a couple luggage pieces about a year ago (SA insisted it would never go on sale) and I have now seen them on FOS for 70% off. That's frustrating, as a consumer I feel like I was taken advantage of.

I'm excited to see what Coach is going to do. If I see that this time they actually stay true to their word and keep the boroughs out of the outlets, I will purchase the 6 boroughs I have my eyes on. And perhaps I will become a loyal Coach customer in the future if they continue to design simple bags similar to the borough/urbane. If I know they won't be giving out promos/discounts right away, I'll be more willing to purchase at full price (if I think the price is right!). I kinda prefer purchasing bags that I know would rarely go on sale. This whole game of finding it at a much cheaper price is exhausting for me, even though I love a great deal! So I think their hope of gaining new customers might work, but it seems that they will be losing a lot of loyal consumers (most of you)...and I don't think I can purchase enough to bring up their sales by myself!

Saint Laurent did a lot of changing around these last few years, and I grew to become a very loyal customer. I think the new designs are insanely gorgeous and simple. People complained in the beginning, but ultimately a new fan base has allowed the company to survive.

Only time will tell! I wish them the best.

I agree. I love a deal but if there is a bag I must have I will drop FP and not worry if or when it will be outlet bound. That said I am looking forward to changes and hope they do well. I see them losing some customers but gaining some too.

 

[melissatrv]

Coach can never get back to where it was a few years ago. There are so many mid-range brands now and the US market is really glutted. Women are also owning/using fewer bags than a few years ago before the housing bubble burst - hence the plan to further make Coach into a "lifestyle" brand. But the younger generation doesn't have the same view of the brand, nor the disposable income, so why will they want to pay a premium for a brand name their moms and grand moms carry? It's like GM trying to foist Buicks on customers under 70, lol!

Not sure I would agree with this. As the mother of teenagers, their friends like Coach bags still. The only difference I see is that the younger set prefers small, cross body bags. I never see any of the girls carrying satchels. Styles like Willis are what seems to appeal to them. And when Coach had the Poppy line I used to see teens at the mall carrying them

 

[tonij2000]

I agree. I love a deal but if there is a bag I must have I will drop FP and not worry if or when it will be outlet bound. That said I am looking forward to changes and hope they do well. I see them losing some customers but gaining some too.

Yep! I bought my black Urbane last year and have enjoyed the heck out of it. If someone finds one in an outlet, great for her!

 

[Syrenitytoo]

This is a great point. Although maybe the people that question the quality aren't the customers they are going for. With the new designs, maybe it is enough to differ tainted the brand to the consumer who would pay higher prices for a bag.

I do think it would be a wise business move to call the two types of bags different names, however, people thinking they are the same thing is exactly what spurred their success at the outlets. They are counting on it.

Either way they go, there is risk. At this point, doing nothing seems more risky. At least people are talking about them. LOL. There is no bad press???

A lot of good points by both of you. I have been a Coach fan since 2000. I originally shopped outlet but as soon as I located a full price store near me, I moved over. It was easy for me to see the difference both style wise and quality wise. Sure price wise but what woman won't pay more for a bag she loves. Then for about 6 years I dabbled in high end designer bags and even sold some of my Coach collection. Then two years ago, I swung back around but nothing really excited me until I heard about Coach's Borough bag and learned of their new designer, Stuart Vevers from LV and MM. As first I was freaked about his new designs but the more I heard the more I liked. Let's face it, Coach needs some shaking up Nd some trendier designs to attract the younger section. I agree there are too many sales to be believable and if you know you could get a bag at a fraction of the asking price, most people will be willing to wait it out for that savings. In my opinion, Coach's real challenge will be to draw its customer base back around to a new way of thinking - be willing to pay the full price tone the first to get a great bag knowing it won't go down in price and won't end up at the outlet. I too think Coach has to seriously differentiate between its FP product and it's outlet product as many people can't tell the difference. Other have gotten its customer base used to this. I hope coach races these comments. We are the people keeping you alive. Now there is a price to be paid. If they are up for the challenge, they will survive. That's my honest opinion. As foe Coach being an upscale line, this is debatable. What is so upscale about LV's $1300 canvas coated signature bags? Nothing. It's all about supply and demand. Coach got its customer based used to something and now they need to need to do some back pedaling. It's going to be a true task. I myself would like to see some energy spent on quality control. If I order a bag, I would like to have it be top notch, nothing wrong with it so I can have it shipped to a friend or myself and know it's going to be virtually perfect. That would be a true claim to fame. There is so much to be said about that. They seem to have customer service in check so much more than many brands who don't even want to know your name once they've made the sale - they just need to extend it to the manufacturing of the product. I vote for Coach - please don't disappoint.

 

[tonij2000]

A lot of good points by both of you. I have been a Coach fan since 2000. I originally shopped outlet but as soon as I located a full price store near me, I moved over. It was easy for me to see the difference both style wise and quality wise. Sure price wise but what woman won't pay more for a bag she loves. Then for about 6 years I dabbled in high end designer bags and even sold some of my Coach collection. Then two years ago, I swung back around but nothing really excited me until I heard about Coach's Borough bag and learned of their new designer, Stuart Vevers from LV and MM. As first I was freaked about his new designs but the more I heard the more I liked. Let's face it, Coach needs some shaking up Nd some trendier designs to attract the younger section. I agree there are too many sales to be believable and if you know you could get a bag at a fraction of the asking price, most people will be willing to wait it out for that savings. In my opinion, Coach's real challenge will be to draw its customer base back around to a new way of thinking - be willing to pay the full price tone the first to get a great bag knowing it won't go down in price and won't end up at the outlet. I too think Coach has to seriously differentiate between its FP product and it's outlet product as many people can't tell the difference. Other have gotten its customer base used to this. I hope coach races these comments. We are the people keeping you alive. Now there is a price to be paid. If they are up for the challenge, they will survive. That's my honest opinion. As foe Coach being an upscale line, this is debatable. What is so upscale about LV's $1300 canvas coated signature bags? Nothing. It's all about supply and demand. Coach got its customer based used to something and now they need to need to do some back pedaling. It's going to be a true task. I myself would like to see some energy spent on quality control. If I order a bag, I would like to have it be top notch, nothing wrong with it so I can have it shipped to a friend or myself and know it's going to be virtually perfect. That would be a true claim to fame. There is so much to be said about that. They seem to have customer service in check so much more than many brands who don't even want to know your name once they've made the sale - they just need to extend it to the manufacturing of the product. I vote for Coach - please don't disappoint.

Great post!

 

[Syrenitytoo]

Not sure I would agree with this. As the mother of teenagers, their friends like Coach bags still. The only difference I see is that the younger set prefers small, cross body bags. I never see any of the girls carrying satchels. Styles like Willis are what seems to appeal to them. And when Coach had the Poppy line I used to see teens at the mall carrying them

Not sure I agree either. There are a lot of younger people who carry Coach's and they are truly more affordable than LV's, Michael Kors, Kate Spade, Tory Borch, Burberry etc.

 

[lacey_stiletto]

I realize I am completely in the minority, but I don't think Coaches new business model is necessarily a bad thing. The outlets generate a great deal of revenue, but I think the vast number of people that shop at outlets cannot tell the difference between a MFF bag and a delete.

As others have said, the FP stores didn't generate the bulk of their income anyway given the overhead for some of those stores. It is a bold move for sure, but I do think they can create a stronger brand for an upscale market by making the bags more exclusive.

In terms of their mainstream customer, I think that the demographics of the mainstream customer is changing. Their are MANY more aging baby boomers with expendable income and fewer 18-22 year olds. I work in higher ed and the numbers of graduating students has declined and is not expected to increase over the next couple years.

I can't say Coach will turn around in 2 years, but I do think that strengthening their brand and restricting supply and access can create a stronger market in the long run.

And perhaps they are counting on continuing increases of sales in their Asia market will buffer earnings while they rebuild here.

I have been buying Coach for 23 years and I will keep my fingers crossed that they are successful. Without seeing a comprehensive strategy, it seems that it would be hard to really predict anything. And in fact, many people on this forum have complained about PCE's and Too many discounts.

I will to my best to help th succeed. LOL.

I agree with you. In the 2 years I've been here in Australia, the numbers of Coach bags I see "on the street" has increased at least 300%. And - the increase is in FP bags, not so much MFF. The prices here are on a par with LV nearly, with only a few outlet locations in the entire country (and the selection there is almost entirely MFF, at prices that make this American hair stand on end .)

Full Price boutiques here have had a "sale section" instore for as long as I've been here. It's not an extensive selection but the discount is comparable to what you might pay at an outlet here, should the bag you want show up (unlikely.)

I like getting a deal as much as the next gal, but I don't think it's possible to keep all the bargain-hunters here happy AND create an aura of exclusivity around the product. Somebody's always going to be unhappy.

I do think this is really going to put a bump in the secondary market - excellent condition pre-loved bags will likely command higher prices on ebay, bonanza, facebook groups, etcetera. Which is probably good news for a number of tpf'ers!

 

[proffashionista]

Yep, we always knew that Coach's upper management have been in a fog for years. Now we know that that fog is made of! :weird:

😄😄😄😄😄lol😄😄😄😄😄

 

[vesperholly]

They seriously have a perception problem. I have been saying for years that they need to name their MFF something different like See by Chloe etc. They will never rebuild the full price brand until they do this.

That is really smart. I like the Poppy idea. I don't know when their outlets started opening, but perhaps they were too early in the outlet market. Back 15 or 20 years ago, outlets really were for clearance and last-season merchandise. MFF didn't exist, so no need to have a different name. The market shifted and they failed to separately brand the lower-priced goods, which would've protected their FP line.

As for the comparisons to JCPenney, I find them rather hilarious since I started shopping there much more when they did their whole no-coupons 180! The Joe Fresh line they brought in is awesome, and they revamped their in-house "JCP" brand with nice, trendy-for-30s-ladies clothes.

 

[tickedoffchick]

Everyone is making great point here. While Coach is still popular with many, many people and you even see some teens carrying it, the company's own sales figures show that they are losing market share. Where they have strength is overseas.

Bottom line: after a certain point, the gap between a bag's quality and its price becomes more and more of an artificial one - in other words, you're paying for a label. (Is a Givenchy really 20 times better made than, say, a Tiganello, for example?) Customers have started to figure that out with Coach, which USED to stand for high, high quality bags that lasted for years.

The MFF bags were being made and sold solely on the basis of the name - cheaper styles, cheaper materials, and a cheaper price -- but in so doing, Coach really reduced people's expectations of quality for the entire brand and created consumer confusion. They have run a great brand into the ground. But as long as various execs got their bonuses and their payouts and then numbers looked okay for a while, that was the only thing that mattered to them. Screw the shareholders and the customers.

OT: Can't wait for someone to finally do an expose on the crap leather people are getting nowadays when they buy anything from handbags to furniture to cars. It's all bonded crap, either shaved so thin you can practically see through it and then glued to a backing fabric or "reconstituted" leather that is actually a mix of ground up leather and vinyl. Some of the MFF bags feel like plastic. Wonder if that's why?

 

[Banuuie]

OT: Can't wait for someone to finally do an expose on the crap leather people are getting nowadays when they buy anything from handbags to furniture to cars. It's all bonded crap, either shaved so thin you can practically see through it and then glued to a backing fabric or "reconstituted" leather that is actually a mix of ground up leather and vinyl. Some of the MFF bags feel like plastic. Wonder if that's why?

Agree!! This need to do this like they do with diamonds. Companies need to indicate what "grade" leather they have used so consumers know what they are paying for. Not all leather is the same and so many people don't know that. I feel bad when consumers get ripped off. People should know what they are getting.

 

[pslpursemom]

Agree!! This need to do this like they do with diamonds. Companies need to indicate what "grade" leather they have used so consumers know what they are paying for. Not all leather is the same and so many people don't know that. I feel bad when consumers get ripped off. People should know what they are getting.

So true, very good point. It would be nice to know what you're buying and make an educated decision. Are you paying a premium for a premium product or are you paying for the company's profit and marketing?

 

[TejasMama]

I thought this analyst view was kind of spot on - comparing this to when JC Penny tried this.

http://www.cnbc.com/id/101776782

This is an excellent piece of analysis and I think they are spot on in many areas. This really stood out:

"Among the similarities between the two brand's transformations, Lejuez wrote, are a team that has never before overhauled a company (Coach CEO Victor Luis was appointed to the role in January, while Johnson came from Apple), a discontinuation of "significant revenue drivers" (Coach's fall lineup will not include its Madison, Legacy or Poppy collections, which account for two-thirds of its handbag sales, while J.C. Penney "abandoned" its $1 billion-plus St. John's Bay brand), and a strategy that is being rolled out without extensive testing."

"The problem is that we do not expect the more luxury customer will be as interested in Coach as Coach is in them," Lejuez wrote. "The bigger risk is that the core customer finds the new product too fashion forward and asks where 'my Coach' went."

 

[katierose]

This is an excellent piece of analysis and I think they are spot on in many areas. This really stood out:

"Among the similarities between the two brand's transformations, Lejuez wrote, are a team that has never before overhauled a company (Coach CEO Victor Luis was appointed to the role in January, while Johnson came from Apple), a discontinuation of "significant revenue drivers" (Coach's fall lineup will not include its Madison, Legacy or Poppy collections, which account for two-thirds of its handbag sales, while J.C. Penney "abandoned" its $1 billion-plus St. John's Bay brand), and a strategy that is being rolled out without extensive testing."

"The problem is that we do not expect the more luxury customer will be as interested in Coach as Coach is in them," Lejuez wrote. "The bigger risk is that the core customer finds the new product too fashion forward and asks where 'my Coach' went."

If they discontinue the Madison line, their problems are just beginning.
This will turn a lot of the core customers away, including myself.
I hope this reporter got it wrong, re: Madison, the Poppy line and Legacy line are long gone.

But I see a lot of new Madison in the new floor set, and the fall preview thread...