Coach Is Closing 70 Full Price Stores

[slowlikehoney]

Renaming the full price line is what I've always believed would have been a great strategy for them. Similar to Michael Kors vs Michael Michael Kors, or something along those lines.

Like others have stated, once your brand has become too diluted or developed a certain reputation, it's almost impossible to go backwards. Guess can't just wake up today & decide they want to be Louis Vuitton.

And what confuses me the most is their main goal seems to be to stop the dilution of the brand, yet they are closing 70 FP stores and only 5 outlets. I simply don't get it. The brand is diluted because of outlet stores and MFF. None of their decision making or rationale makes any sense. I feel like these people have no idea what they're doing. They're just throwing out every idea they have out there to see what will stick. I sold my stocks last year and I haven't looked back. I knew this was coming, and I'm predicting it's only going to get worse. No way they're turning this around in 2 years. None of their decisions points to this happening.

I thought that was weird, too, not closing more outlets. But then I realized that's probably where most of their money comes from. Considering the FP is always empty and the outlets packed to bursting with people scrambling for bags.
We have way too many FP stores where I live. I can think of 3 right now within a 15 mile radius. And that's not counting the department stores.
But I agree that I have doubts about them being able to go backwards to their former glory, which I do think is their goal. Not to LV status, just Coach in the heydays. But I can't see that happening, sadly.

 

[crazyforcoach09]

I thought that was weird, too, not closing more outlets. But then I realized that's probably where most of their money comes from. Considering the FP is always empty and the outlets packed to bursting with people scrambling for bags.
We have way too many FP stores where I live. I can think of 3 right now within a 15 mile radius. And that's not counting the department stores.
But I agree that I have doubts about them being able to go backwards to their former glory, which I do think is their goal. Not to LV status, just Coach in the heydays. But I can't see that happening, sadly.

Now this I agree with - They not gonna close their MONEY MAKING stores.

 

[GA Peach]

Now this I agree with - They not gonna close their MONEY MAKING stores.

Exactly. Their financial statements clearly show that most of their money is made from the outlet stores. Much lower overhead with the outlets, too.

 

[Girl_LV]

I think they'll keep a lot of outlets open, until they get to their goal (raising brand status and driving FP sales). If they are able to hit their goal then I see them closing all the extra outlet locations which will lead to about 1 or 2 per state, like how things use to be.

 

[Caramel27]

This makes me feel sad, but not surprised. It's like a constant gamble, and my buying habits have changed a lot. I have more money to spend but it's almost stressful. Here's what I think my problem is - one of the biggest tools in sales is psychological ownership, right? I can't do that with Coach, because they churn through product lines so quickly that I can't make one of their bags and/or accessories a "goal" for savings. Wish them all the luck in shooting for a higher end customer (combined with a rude hand gesture for dismissing my brand loyalty for over 20 years), but how exactly do they plan to make that work without an anchor? Where is their Neverfull, Speedy, Luggage Tote, Stam? It's not the Borough, that's a very specific taste. Seems like they draw straws and the lucky winner gets to design their entirely new bag line every fiscal quarter, none of which share features with the previous line. Exceptions include "they liked the 2006-2007 Legacy stuff. It had heavy leather and cool turnlocks. GENIUS! Let's make turnlocks a thing! We can talk about how we've been turnlocky for like EVER! Then we'll abandon them in 4 months and send all of it to the Outlet! To the Coachmobile!"

I've always found this odd about Coach too. They don't seem to have a signature bag, aka The Bag. The Birkin to their Hermes or the Hamilton to their Michael Kors. That bag that the non Coach consumer wants and that bag that they can keep putting out every season while making slight design changes.

In a way, I think Coach is a victim of it's own creativity. This company has put out many gorgeous bag designs over the years. Perhaps almost too much too soon, that they've never had enough time to have their Signature bag. Yes, the Borough was hot this season but like you stated, that's more for a specific type of consumer and not the average.

 

[Caramel27]

I thought that was weird, too, not closing more outlets. But then I realized that's probably where most of their money comes from. Considering the FP is always empty and the outlets packed to bursting with people scrambling for bags.
We have way too many FP stores where I live. I can think of 3 right now within a 15 mile radius. And that's not counting the department stores.
But I agree that I have doubts about them being able to go backwards to their former glory, which I do think is their goal. Not to LV status, just Coach in the heydays. But I can't see that happening, sadly.

I agree. So it pretty much seems like Coach is trying to have its cake and eat it too. They want to attract higher end consumers, and stop the brand dilution. Yet they are not willing to reduce outlets and reduce production. Which is what puzzles me. What they want to accomplish is difficult but possible, however they are not willing to do what is needed.

That article from 2005 is an excellent read. It seems in the last few years, Coach basically looked at that article, decided to do all the things they predicted would bring down the company, and viola! Here we are today.

 

[slowlikehoney]

I agree. So it pretty much seems like Coach is trying to have its cake and eat it too. They want to attract higher end consumers, and stop the brand dilution. Yet they are not willing to reduce outlets and reduce production. Which is what puzzles me. What they want to accomplish is difficult but possible, however they are not willing to do what is needed.

That article from 2005 is an excellent read. It seems in the last few years, Coach basically looked at that article, decided to do all the things they predicted would bring down the company, and viola! Here we are today.

LOL!
Yep. They want to bring status to their brand, but can't afford to stay afloat without the outlets. They've definitely painted themselves into a corner. It's too bad but I don't think they can unring that bell now and all they're going to end up doing is ticking off all their most loyal customers.

 

[hollyyih]

Well closing more of the outlets would be more beneficial in the long run as the idea you can get a bag for $100 that is branded Coach isn't going to really make you want to spend $300-$500 on one... YKIM?

Also, probably why certain high end brands do so well, because of exclusivity. I mean waiting for my Chanel WOC took forever and I definitely value it for that as much as the price!

 

[noshoepolish]

Yep. When was the last time you heard a guy say "Honey, let's go to the outlets. I want to shop for a man bag"? Men usually hate to shop. I am betting most wallets, key fobs, belts, etc are gifts. Not too sure they even shop for their own business bags.


At first I thought the men's outlet was a great idea but then they made all of those outlet bags for me. I just did not see that as a good idea.

NO!!

ITA it was a bad idea. my outlet is divided into two areas and the men's side is always deserted! it's a waste of good space even though it is much smaller. your idea of sending the unsold to the FO is much better idea.

 

[hobophantom]

Just got back from my FP store. Was making a return which I had paid for in cash. They only had $77 in the drawer so had to give me some cash and remainder on merchandise credit, which was fine with me. The SA told me that they had only THREE sales today. Hope they don't close that store as it is in tax-free NH.

 

[FashionNewby14]

I think the Mens outlets were a silly idea. Stick to the regular priced mens bags and transfer unsolds to the factory stores. They rarely have more than a few mens items anyway.


Factory store mens line? Is there a need?

Totally agree! Stumbled upon the men's outlet...went in...zero customers. Asked SA if it ever gets busy and she laughed and shook her head no.

 

[missmoimoi]

I've always found this odd about Coach too. They don't seem to have a signature bag, aka The Bag. The Birkin to their Hermes or the Hamilton to their Michael Kors. That bag that the non Coach consumer wants and that bag that they can keep putting out every season while making slight design changes.

In a way, I think Coach is a victim of it's own creativity. This company has put out many gorgeous bag designs over the years. Perhaps almost too much too soon, that they've never had enough time to have their Signature bag. Yes, the Borough was hot this season but like you stated, that's more for a specific type of consumer and not the average.

+1

Coach went overboard and flooded the market - they are treating their own handbag products like disposable merchandise - churning or turning them out too fast. For consumers who love bargains & constantly enjoy buying NEW, it obviously works for Coach but yea, they can't have their cake & eat it too - how can you treat Coach brand as "exclusive" when there's a surplus feel at the same time?

 

[applecidered]

I don't think it's as much an issue on "special" bags than about false pricing practices. The outlets are wildly popular because you know a so called $400 bag can be had for around $150, so why bother paying anything remotely close to full price when they have those measly 30% off sales?

Another issue that bothers me is just how drastically they turn over styles, similar to Dooney and Bourke. For me Coach symbolizes the classic, with thick durable leather, no logos, simple colors, no patterns, sturdy hardware, etc. it's classically American yet they've been running circles chasing fast fashion instead. The short return to that style was great, but now nothing catches my eye anymore. Anyway, it's tough to keep a customer base happy.

 

[swags]

I knew this was coming.


Those on here a while probably remember Coach's glory years, when the stock shot way up? Think about what was going on at that time

• Coach had a VERY successful Madison line (Sophia/Sabrina days)
• PCE was not what it has been....every other week. PCE was done usually quarterly. And it really gave you something to look forward to
• There were no Facebook coupons. Not sure if there was FB and if so it did not enjoy the mainstream popularity it does now
• There were no FOS sales every week because here was no Factory Online Sale
• Then when they started FOS, it was not every week. Again like the old PCE you had something to look forward to. Sometimes I don't even check FOS anymore,. I will just see the same stuff I saw last week. Price might fluctuate though
• Deletes would take 6 months to go to the outlet. But they were there and all outlets got them not just flagship. There were always some outlets that got more but even the smaller outlets still got some
• Which deletes the outlets got was not predictable either. It was a nice surprise what you might find....like a treasure hunt. And every once in a while you would find a bag from a couple years ago. Not returns, Coach would just all of sudden open the vault. Remember ladies how busy Saturdays and Sundays used to be here with all the outlet reveals?
• Now it is standard that outlets always have an additional % off coupon when you walk in - then they did not. If they had a coupon it was a surprise. And you took advantage when they did have a coupon because you did not know when they would have them again
• They were not making MFF bags in mass that were based on full price styles

And my personal pet peeve, they made great bags in medium size. Coach continues to almost exclusively make large bags and mini bags now.

This model worked. This model got people excited about Coach. Then they diluted the brand with constant PCEs and FB coupons, constant FOS, limited outlet deletes and only to flagship stores, MFF bags modeled on FP styles....they got crazy. Now they are going to the extreme with the new plan which I think will bite them. Why don't they look at what was working, what was going on when things were good and re-visit that?

Those were the days. I remember being so excited to get my 2006 legacy bag when the pce invite came in the mail. I rarely go to the boutique anymore.

 

[Suzanne B.]

I don't think it's as much an issue on "special" bags than about false pricing practices. The outlets are wildly popular because you know a so called $400 bag can be had for around $150, so why bother paying anything remotely close to full price when they have those measly 30% off sales?

Another issue that bothers me is just how drastically they turn over styles, similar to Dooney and Bourke. For me Coach symbolizes the classic, with thick durable leather, no logos, simple colors, no patterns, sturdy hardware, etc. it's classically American yet they've been running circles chasing fast fashion instead. The short return to that style was great, but now nothing catches my eye anymore. Anyway, it's tough to keep a customer base happy.

And overproducing most of them.

I knew this was coming.

And my personal pet peeve, they made great bags in medium size. Coach continues to almost exclusively make large bags and mini bags now.

OMG! This EXACTLY! I see a lot of new styles coming out that I like the looks of, but would never own because of the size. The only new style I like on Coach.com is the Madison top handle and it's tiny! The Preston came in the mini or regular.....nothing in between and a lot of us are the 'in between' size users. The Sophia, Kelsey and the E/W duffle size users/buyers.