Coach wants to be the American Louis Vuitton...

[mrceral]

Interesting read. I've always been a big Coach fan but I think they devalue their brand a lot.

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.

http://qz.com/471448/coach-wants-to-be-the-american-louis-vuitton/

 

[tonij2000]

Interesting read. I've always been a big Coach fan but I think they devalue their brand a lot.

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.

http://qz.com/471448/coach-wants-to-be-the-american-louis-vuitton/

I'd like to know how he plans to do it while continuing to churn out so many bags that sending them to the outlets is inevitable.

 

[mrceral]

I'd like to know how he plans to do it while continuing to churn out so many bags that sending them to the outlets is inevitable.

And this too...

Coach is trying to address the problem. It has cut way back on promotions, reducing flash sales from three each week to just two per month. But that strategy has started to hurt. North American sales were down 20%, “impacted by our deliberate actions to curtail promotions and elevate brand perception,” Luis said.

Two sales per month is still unheard of for a luxury house.

 

[tonij2000]

Maybe they'll one day realize that they make too much product...

 

[lcaddict]

They need to close 80% of their outlets, make better products (quality not quantity), and slowly, very slowly markup their prices and discontinue lower priced items. They also need to better differentiate their MFF vs boutique products. Why would I spend so much money on boutique products when I could just grab a cheaper bag from the outlet and no one could tell the difference?

 

[whateve]

I think they need to gradually increase prices, rather than hit their loyal Coach fans with huge price increases. People who are used to paying $300 to $500 for new bags are going to balk at paying $600 to $1000. Every higher end Coach I've bought ended up at the outlet.

 

[HesitantShopper]

I can't help but feel like they should stop trying to be something they are not and concentrate on making quality products that they built the brand on.

The concept we want to price ourselves out of this world, i guess for some people it maybe all about price but for me i want the item to be worth that and half(heck more than) the luxury goods out there are in no way able to warrant their high price points as it is.

 

[stardustgirl]

I can't help but feel like they should stop trying to be something they are not and concentrate on making quality products that they built the brand on.

The concept we want to price ourselves out of this world, i guess for some people it maybe all about price but for me i want the item to be worth that and half(heck more than) the luxury goods out there are in no way able to warrant their high price points as it is.

I used to want a Chanel bag, then I learned that the gold hardware is no long truly gold yet the prices continue to skyrocket. Maybe someday I'll get a vintage one that really was doing something to command the price rather than just its image. As it is right now, Coach is a good value for the cost for the most part (I say as a mostly on-sale shopper). They've got a good niche with that. It would be a shame if they threw it away.

 

[StarBrown]

I can't help but feel like they should stop trying to be something they are not and concentrate on making quality products that they built the brand on.

The concept we want to price ourselves out of this world, i guess for some people it maybe all about price but for me i want the item to be worth that and half(heck more than) the luxury goods out there are in no way able to warrant their high price points as it is.

Quoted for emphasis

 

[StarBrown]

If Coach would do the following four things, I would tell Marc Jacobs and Louis Vuitton to kick rocks:

1. Stop manufacturing bags in China
2. Only use leather
3. Make fewer bags
4. Close some outlets and eliminate MFF goods

 

[TejasMama]

I don't see how they are going to elevate themselves to a higher luxury status while keeping the outlets, which still provide the vast majority of their annual sales . They simply depend on that cash too much to let go of it.

I think there is room for them to regain some of their status as an affordable luxury brand, and I think that is a better place for them to be than trying to scale that mountain that is premier luxury. They would probably have better luck overseas than here in the US.

Mulberry tried this same strategy and had their strategy handed right back to them with plummeting sales and loyal customers leaving in droves. I would hate for Coach to fall victim to the same thinking.

 

[QueenLouis]

They need to close 80% of their outlets, make better products (quality not quantity), and slowly, very slowly markup their prices and discontinue lower priced items. They also need to better differentiate their MFF vs boutique products. Why would I spend so much money on boutique products when I could just grab a cheaper bag from the outlet and no one could tell the difference?

Everyone here can tell the difference between boutique & MFF. I have a harder time telling the difference between MFF and fakes.

 

[gr8onteej]

Coach just needs to be Coach.

 

[theFlip#2]

Coach just needs to be Coach.

Unfortunately, they've forgotten who they used to be.

 

[applecidered]

It can't happen. Not that in America we don't purchase American branded items, but the perceived European quality is the one thing Coach cannot achieve. Just take a look at the "premier" section of TPF. None are American brands. It's like comparing a Cadillac to BMW. With that budget people will more likely get the beemer.