Why Goldman Sachs Believes Coach's (COH) Turnaround Is Alienating Consumers

[ildera5]

I'm in Canada and I think some of the new prices here are utterly silly now. It just does not compute for me (plus I see a decline in quality materials).

Amen! Totally ridiculous! BUT, I think it might not bug me as much IF I liked the items. It makes me sad bc this is the first year in forever where I have told people, "Please, no Coach gift cards for Christmas." Of course, they couldn't believe their ears .. LOL!

 

[ildera5]

My SA also told me there is some kind of "VIP" event on Black Friday. What exactly it is is not known yet. Oh brother Coach...Seriously?

I have not heard about that, mind you, Black Friday up here is not like it is in the States . What I did hear today, from my SA, is that the SAS will only be before Christmas for certain people .. then again, Coach contradicts itself a lot .

 

[Luv2Shop1]

I wonder if the VIP event is going to be like last SAS when they sent "select" customers early access to the sale--where newer merchandise was included that wasn't included in the "public" sale.

 

[ltbag]

I wonder if the VIP event is going to be like last SAS when they sent "select" customers early access to the sale--where newer merchandise was included that wasn't included in the "public" sale.

Well if it is then I am out in the cold because I was not invited to the vip presale last time. It did not make me boycott Coach though, as I ended up buying nothing from the SAS sale anyway and would not have bought during the presale either.

I am now in a mode with Coach where I buy the styles I like, try to get a fair price (ie get them to match the endless sales) and don't worry about whether its going to end up at the outlet or anywhere else cheaper in six months.

I am buying much less so I can afford to not worry about whether or not I could have gotten an extra 20%-30% off if I had waited longer to buy the bag. I am enjoying my Dakotahs now.

 

[ms-whitney]

I still don't get how Coach is trying to become more "exclusive." My SA told me that was their goal with the new line. I asked her how Coach is going to achieve exclusivity when anyone can go to the outlet, get a cheap siggy bag and flaunt their new Coach all around the mall. Sure enough, the shoppers who came in to look at the new stuff were carrying their mff siggy bags and gawking at the prices in the store. It made me sad to see every customer walk out empty handed and (dare I say) pissed off.

Coach has deteriorated on soooo many levels and it's been happening for awhile now, staggered over the past five years, easily.

There's a couple of things that have hindered them, because they've always been a huge profit margin company and investors loved that.

They needed to make more $$ year after year and with any cycle there's always a peak.

To combat against decline in economy and to make up for the "lack" of perceived customers once the economy when sh*t (I mean, everyone suffers, but those who stick to their guns..)

They started to have more:
**Outlet goods to push the sales
**Pces
**products made slightly less better to keep same price point (eg the bag is still 298 but the leather is dyed surface only and easily scratched)
**poppy line that allowed them to have even lower price point and more "fashion forward"

At this point they feel like Gap, the ever confused company in terms of what their identity is, and, having too much supply and not enough demand to move goods fast enough to avoid an outlet overfill--critical when they're upping their factory production

They forget their roots, even as they tried to tell the public they're looking to it for inspiration
They didn't account for social media to put their pce on blast on such a scale that it's made an impact, sure, they tried to combat by inviting bloggers to give preview and even had blogger designed bags.

They've thrown everything into the mix and they forget, coach use to be the place you'd get a graduation bag for your HS or college graduate. The leather was so supple and nice for the price that that was where the popularity came. You can flirt with fashion a little to keep the masses coming (siggy and bright colour leather or patchwork being some examples) but at the core of those designs, it was still coach.

You can tell its a coach bag.

With the new ceo, and steve, I feel like coach can turn this ship around by taking it in a new direction.

I say that now, because the spring isn't so bad compared to what fall (currently out, which 90% tells me that he hasn't shakened mulberry's DNA quite yet and brought that over to Coach)

But I'm starting to see them try and bring a bit of identity that may be new but still won't completely alienate what coach was good at..because times are changing, and that's why the SA, and why I quote this, sorry for long wind, is saying coach wants to be more "exclusive"

They want to scale back on the amount of stores they have to lower the overhead cost, while expanding presence already felt in dept stores as to not lose footprint, simply changing it so the SA are directly from coach (like gucci, for ex, at saks, works for Gucci not saks)

But they also want to tighten the reign on the products and the factories..

Which is an uphill climb because people are so used to quick turnover of products and outlet shopping so coach is really going to have to knock it out of the ballpark to make people start shopping out of the stores again.

So less mass produced (which I'm hearing from peanuts being sold out, rather have some disgruntled customers than a huge amount floating around diluting the product)

And better customer service and consistancy whether it's at dept store or full price boutique..and I think they need work on both, the product and customer service, which in past, both have been relatively stellar

 

[CCfor C]

Coach has deteriorated on soooo many levels and it's been happening for awhile now, staggered over the past five years, easily.

There's a couple of things that have hindered them, because they've always been a huge profit margin company and investors loved that.

They needed to make more $$ year after year and with any cycle there's always a peak.

To combat against decline in economy and to make up for the "lack" of perceived customers once the economy when sh*t (I mean, everyone suffers, but those who stick to their guns..)

They started to have more:
**Outlet goods to push the sales
**Pces
**products made slightly less better to keep same price point (eg the bag is still 298 but the leather is dyed surface only and easily scratched)
**poppy line that allowed them to have even lower price point and more "fashion forward"

At this point they feel like Gap, the ever confused company in terms of what their identity is, and, having too much supply and not enough demand to move goods fast enough to avoid an outlet overfill--critical when they're upping their factory production

They forget their roots, even as they tried to tell the public they're looking to it for inspiration
They didn't account for social media to put their pce on blast on such a scale that it's made an impact, sure, they tried to combat by inviting bloggers to give preview and even had blogger designed bags.

They've thrown everything into the mix and they forget, coach use to be the place you'd get a graduation bag for your HS or college graduate. The leather was so supple and nice for the price that that was where the popularity came. You can flirt with fashion a little to keep the masses coming (siggy and bright colour leather or patchwork being some examples) but at the core of those designs, it was still coach.

You can tell its a coach bag.

With the new ceo, and steve, I feel like coach can turn this ship around by taking it in a new direction.

I say that now, because the spring isn't so bad compared to what fall (currently out, which 90% tells me that he hasn't shakened mulberry's DNA quite yet and brought that over to Coach)

But I'm starting to see them try and bring a bit of identity that may be new but still won't completely alienate what coach was good at..because times are changing, and that's why the SA, and why I quote this, sorry for long wind, is saying coach wants to be more "exclusive"

They want to scale back on the amount of stores they have to lower the overhead cost, while expanding presence already felt in dept stores as to not lose footprint, simply changing it so the SA are directly from coach (like gucci, for ex, at saks, works for Gucci not saks)

But they also want to tighten the reign on the products and the factories..

Which is an uphill climb because people are so used to quick turnover of products and outlet shopping so coach is really going to have to knock it out of the ballpark to make people start shopping out of the stores again.

So less mass produced (which I'm hearing from peanuts being sold out, rather have some disgruntled customers than a huge amount floating around diluting the product)

And better customer service and consistancy whether it's at dept store or full price boutique..and I think they need work on both, the product and customer service, which in past, both have been relatively stellar

Great assessment, Whitney...glad to see you are still on TPF...

 

[ms-whitney]

Great assessment, Whitney...glad to see you are still on TPF...

Thank you! I still float around but I haven't seen anything in the past after I stopped working for them, that I would want. It's kinda hard to buy full price after working there and, I brought a bit when my friend still worked there on her allotment but I always felt bad. She's moved on since.

I'm hopefully for next season because I still want to buy coach, but we will see I guess

 

[daniellesmommy]

I went into the Coach store at the mall last night with my mom just took look. Like usual it was completely empty with 3 SA's standing around chatting. I haven't seen anything I wanted in almost 2 years. But what surprises me was the SA's comparison of Coach to Prada. Saying the new line was comparable to Prada's bags but Prada is 2K and this bag was only 550 and such a great price for the same quality. How can you even compare the 2? Totally different ends of the spectrum and I was completely turned off by her comments. If I could afford Prada I wouldn't be buying a Coach bag.

 

[melissatrv]

I went into the Coach store at the mall last night with my mom just took look. Like usual it was completely empty with 3 SA's standing around chatting. I haven't seen anything I wanted in almost 2 years. But what surprises me was the SA's comparison of Coach to Prada. Saying the new line was comparable to Prada's bags but Prada is 2K and this bag was only 550 and such a great price for the same quality. How can you even compare the 2? Totally different ends of the spectrum and I was completely turned off by her comments. If I could afford Prada I wouldn't be buying a Coach bag.

I would not fault the SAs for this. They are probably told to use this as a selling point. I feel bad for SAs at the full price stores now. Must be so hard to make sales with the higher prices and dept store discounts

 

[DesigningStyle]

I went into the Coach store at the mall last night with my mom just took look. Like usual it was completely empty with 3 SA's standing around chatting. I haven't seen anything I wanted in almost 2 years. But what surprises me was the SA's comparison of Coach to Prada. Saying the new line was comparable to Prada's bags but Prada is 2K and this bag was only 550 and such a great price for the same quality. How can you even compare the 2? Totally different ends of the spectrum and I was completely turned off by her comments. If I could afford Prada I wouldn't be buying a Coach bag.

How foolish of Coach to say such a thing. Oh my!

 

[Alexa5]

So, I walked by the FP store this weekend, and my thoughts were that they have regressed quite a bit. Instead of seeing a bunch of fresh new bags, I saw bags that looked like ones they have had in the past, and in fact did have some old bags resurface (the Kelsey). Not that I don't like the Kelsey, but it just seemed odd to see bags that were either resurfaced bags, or bags that looked very similar to previous styles when they are trying to hype up their new image.

I saw the Rhyders in the back and they stood out a little bit, but not to the point to draw me in.

I was just really surprised about how the store looked as literally nothing was calling me or other shoppers in.

I also noticed that the department store selections were kind of weak as well. I just feel like something is definitely missing right now. Shopping in my own dresser is much more interesting right now (and cheaper!).

 

[baglady39]

I would not fault the SAs for this. They are probably told to use this as a selling point. I feel bad for SAs at the full price stores now. Must be so hard to make sales with the higher prices and dept store discounts

ITA! In fact SAs have mentioned this exact point to me. Same at the Reed Krakoff store when it existed. It's about the bang for the buck is their point, and sometimes I agree. But as for Coach, until they start controlling the dept store issue, I don't see it getting any better, and even then, I'm still far from convinced. I have to say I did see more people this weekend in one of the stores I usually see very few people to nobody, but all of the customers walked out without buying except for one couple, and I think they had a return. I might be wrong and it might have been an exchange, but something was definitely returned. However, I'm seeing more people in stores anyway- around here people have already started holiday shopping.

I also chatted with our Nordstrom SAs, and I was told they quit carrying Coach in store because Coach would only send them bags that "nobody wanted". I guess I thought they had some selection since they do have a buyer that buys for their dept, but she said no, and that was the problem so some stores have just quit carrying their products. I admit I never saw much Coach traffic there, and the bags didn't appeal to me either, but then I've also been relatively over Coach for a while now myself. I'm still over full price for the most part too- so far so good with my only one fp Coach bag per season rule, but as always, we'll see how long that lasts!

 

[Jennylee133]

Well if it is then I am out in the cold because I was not invited to the vip presale last time. It did not make me boycott Coach though, as I ended up buying nothing from the SAS sale anyway and would not have bought during the presale either.

I am now in a mode with Coach where I buy the styles I like, try to get a fair price (ie get them to match the endless sales) and don't worry about whether its going to end up at the outlet or anywhere else cheaper in six months.

I am buying much less so I can afford to not worry about whether or not I could have gotten an extra 20%-30% off if I had waited longer to buy the bag. I am enjoying my Dakotahs now.

I think this is a great mindset and I am trying to think about it the same way. I bought the oxblood Gramercy at FP and was 100% ok doing so because I wanted it immediately and really liked it enough to pay the $498.

That being said...when I wanted a second I was able to wait and get 25% off the mini croc at Macy's.... in the past I would have wanted to fuss around re-buying to get the 25% off the first too but since I don't really see anything else I want until spring I guess it all balances out and I get a few extra weeks of enjoyment out of the oxblood

 

[whateve]

I think this is a great mindset and I am trying to think about it the same way. I bought the oxblood Gramercy at FP and was 100% ok doing so because I wanted it immediately and really liked it enough to pay the $498.

That being said...when I wanted a second I was able to wait and get 25% off the mini croc at Macy's.... in the past I would have wanted to fuss around re-buying to get the 25% off the first too but since I don't really see anything else I want until spring I guess it all balances out and I get a few extra weeks of enjoyment out of the oxblood

I didn't realize Macy's had the mini croc! My Macy's never gets anything good.

 

[Jennylee133]

I didn't realize Macy's had the mini croc! My Macy's never gets anything good.

Mine doesn't either but I checked online this time because I know the mini is probably a bit less practical but I desperately wanted it so figured getting it at 25% off made it more reasonable!

If they still have it online they should be doing pre-order for F&F soon!