This article is from the latest issue of Forbes. Since it talks about how Coach wants to compete with high-end designers like Louis Vuitton and Prada I thought it appropriate to post on the main handbag forum. I found the article quite interesting. As a fan of Chanel I don't know if I would put Coach in the same category. I was just wondering how others felt about it. Trading Up Allison Fass 01.29.07 Coach has thrived peddling accessible luxury. Now it sells handbags that will give mainstream fans sticker shock. Shoppers jam the Coach flagship store on Madison Avenue in Manhattan to eyeball 230 stylish handbags. Average price: $300. Few seem to notice a nook set apart by striped curtains, a section of great interest to Coach Chief Executive Lewis Frankfort. There, a Coach courier bag costs $800. A $1,300 sweater coat hangs near a pair of $700 jeans. A charm necklace, priced at $250, rests on a table atop a zebra-skin rug. Frankfort pauses during a recent visit to admire a Coach satchel made from python skin, and its $2,500 price tag. The higher-priced items and exotic animal skins are part of Frankfort's plan to burnish the Coach brand and expand the market for its bags and accessories. The new offerings cost 48% more on average than earlier Coach products. They were introduced in September to celebrate Coach's 65th anniversary. The upscale assortment has been so successful it represented 18% of Coach's revenue from full-price shops this past October and November. This year Frankfort intends to make it a stand-alone brand called Legacy with its own stores. "The addressable market for Coach is a lot larger than we ever contemplated," Frankfort says. "It's huge." By offering more high-end bags and apparel while Coach also accelerates store openings in less affluent cities like Buffalo, N.Y., El Paso, Tex. and Gainesville, Fla., Frankfort hopes Coach can keep its cachet and attract dollars available at the upper end of the luxe market. Other luxury companies, including Ralph Lauren and BMW, successfully cater to multiple income tiers. Appealing to Park Avenue ladies who lunch, as well as sweatsuit-clad shoppers in Jersey City--and everyone in between--could help the retailer maintain its breathless eight-year-long growth streak. The company, with 443 stores, has made a fortune selling stylish but fairly affordable handbags. Revenue has quadrupled since the company went public seven years ago, when Coach bags were most often purchased by career women looking for well-made totes. In the year ended last July 1, sales rose 23% to $2.1 billion, and income before interest and taxes rose 34% to $765 million. The company's stock hit a high of $45 this month. Frankfort, 60, expects the Legacy assortment, emblazoned with Coach's logo, to attract fashionistas who usually favor Louis Vuitton and Prada. If you are the kind of person willing to spend $4,500 for a lime-green ostrich-skin bag, Coach is there for you. It now offers expensive accessories, like a $120 iPod case. Soon there will be perfume, too. Coach quickly sold all eight of the $10,000 tobacco-color Ali Alligator shoulder flap bags it rolled out as part of the Legacy collection. "It's amazing how many people ask me now, 'Can you hook me up with Legacy?'" says Samuel Frankfort, 28, Frankfort's son, a Wall Streeter who hobnobs with a posh crowd--and tagged along during his father's interview. The premium push comes as industry watchers whisper that Coach is saturating the middle market, making its logo--and its more moderately priced bags--too ubiquitous to be desirable to well-heeled shoppers. Frankfort wants to attract more buyers like Ingrid Deutsch, who favors Christian Dior and shuttles among homes in Manhattan, East Hampton and Palm Beach. But she sniffs that Coach is too "pedestrian" for her taste. "The upper-income consumer is looking to replace Coach with another brand," says Marshal Cohen, an analyst at NPD Group, retail consultants in Port Washington, N.Y. Legacy isn't Frankfort's first stab at chasing a tonier crowd. When Coach was still part of Sara Lee in 1993, Frankfort oversaw the acquisition of Mark Cross. But it cannibalized customers from Coach and distracted execs, so Frankfort, who joined Coach in 1979 when sales were just $6 million, discontinued Mark Cross four years later. Coach execs insist there is plenty of room for growth--and that Coach can sell an $800 bag as easily as a $50 wristlet purse. "The broader we get, the less issue we have around having a lot of customers carrying Coach, because they are all carrying different Coach bags," says Reed Krakoff, Coach's executive creative director. Adds Frankfort: "Frankly, we're more optimistic about our future than we were 12 months ago."