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

[melissatrv]

I have friends too who like the new line and are surprised the bags are Coach. But will they buy them? The response from my friends is "that is too expensive for a Coach bag"


I like Kate Spade and Michael Kors, the main competition for Coach, but I will never pay FP for Kate Spade. I know I can always get them at a limited exclusion sale at my dept store and that it does not take too long for it to go on sale at the Kate Spade stores. I don't know anything about their outlets (if they are deleted styles or MFF bags there). I don't think I have ever paid over $250 for KS.


However, I have paid full price for a couple of MK bags because can sell out if a color is popular. MK fans will be able to attest to how hard it is to find Medium Selmas and Med Suttons in Dark Dune. Most of the time though I will wait for a sale or dept store discount. But even at full price these prices are easier to swallow than $600.


My point is, that shoppers are trained to buy at certain price points. Let's say Kate Spade stopped having sales, can I afford $400-$500 for a full price bag? Yes. Will I pay that much after becoming accustomed to buying at 30-50% less? No


Ultimately what matters is that the customers not only like the new styles, but if they are willing to pay the higher price points. This remains to be seen. I bought my Multi Python Crosby with Coach matching a dept store discount.

I think it is too early to count them out. Interesting, I was ready to count them out, but I am impressed with the new design direction.

I have had several friends that were Coachies ten or twelve years ago that are flipping out about the Vever's fall line.

One friend who literally couldn't stand Coach commented last night that she almost cried when she received an email from Coach and that the bags were "GORGEOUS GORGEOUS". And then exclaimed that Coach is "Back!!!" She thinks SV is doing an amazing job of revamping the company.

I would have bet $1k that this person would never utter these words. The response from non-Coachies or former Coachies has been consistently surprising to me.

We all knew a turnaround wouldn't happen over night and that financially they would take an immediate hit as they try to turn the brand around.

Private equity seems like a logical way to find this type of transition. If some of the reactions to the new direction are indicative of a larger, broader demographic, than perhaps they are doing something right. It will take a good 18-24 months of comparative earnings to really know how successful their rebranding efforts have been.

Add to that the fact that MK is tanking because everyone is carrying them and they saturated the market (did they learn nothing from Coach's market saturation mistakes?" And Coach has an opportunity to grab that market share if they do things right.

Just MHO, but I see some interesting things going on. I am looking forward to see how this story plays out! If it works, this will be the stuff of business school case studies throughout the world!!

 

[melissatrv]

I think Coach will make more of these fobs, but in typical Coach cluelessness, by the time they hit the stores, the novelty will have worn off and they will be stuck with a bunch of them and then we will see them at the outlets....

Seriously once the styles of bags that these fobs were made for go out of the fp rotation, the frenzy for the fobs will die down I imagine.

Yeah, there are certainly no shortage of Rhyders. Now if the feather fobs hit the outlets, Coach management would need 24 hour security detail!!!!!

That's funny about the fobs and security detail! Seriously I bet Coach is now scratching their heads that they did not make the feather fobs to sell separately as they would have a hit on their hands. As ltbag says they will realize their mistake and will make them in mass around spring. But by then the novelty has worn off and they will seem too "heavy" for a spring item and they will end up in large quantities at the outlets


Agree about the Ryders. I want the Bronze one but the quality is just not there to pay anywhere near full rpice IMO. Not for the smaller standard ones. I would buy the Bronze one if it hit the outlets though and am going to hold out for it. But if it never makes it there it won't be that big of a deal to me. I want the Whipstitch Taxi tote in Teal but not at $595. Hoping they hit the dept stores in that color so I can at least get a 25% discount

 

[swags]

I went into the Coach store today and haven't been there in years. I was shocked to see it empty on a Saturday afternoon. That was in sharp contrast to the factory store at Ontario Mills were its always packed with people with bags all up both arms and a line snaking through the store.


I still like Coach and was happy to see the Rhyder bags and the Crosby bags in the store. They are very nice looking bags. I remember back when the Carly was popular that store was always full. Sad to see it like this these days.

They need another hit like the Carly or Sabrina and then keep it around for awhile but with different colors and fabrics. Kind of like MK and the Hamilton. They did good with Phoebe but I think they released too many colors too quickly. Gotta stagger things and leave people wanting more.

 

[Luv2Shop1]

I went into the Coach store today and haven't been there in years. I was shocked to see it empty on a Saturday afternoon. That was in sharp contrast to the factory store at Ontario Mills were its always packed with people with bags all up both arms and a line snaking through the store.


I still like Coach and was happy to see the Rhyder bags and the Crosby bags in the store. They are very nice looking bags. I remember back when the Carly was popular that store was always full. Sad to see it like this these days.

I mainly shop at SCP and most of the time traffic is pretty light. Not like in the "old" days when you had to wait to talk to your SA because she was so busy.

The other telltale sign of Coach's flagging popularity is the traffic in this forum. It used to be busy all the time, now, not so much.

 

[ltbag]

I mainly shop at SCP and most of the time traffic is pretty light. Not like in the "old" days when you had to wait to talk to your SA because she was so busy.

The other telltale sign of Coach's flagging popularity is the traffic in this forum. It used to be busy all the time, now, not so much.

My FP store is never busy either, but it will match the dept store prices if it is the exact same bag. I got them to match on a different bag during the Macys sale, but once again they have changed policies and now it is same exact bag (must be the same color too) price matching only. I think one of Coach's problems is that they can not come up with a consistent set of policies that apply to ALL their stores and STICK to them. Who wants to feel that someone else will get a better deal because they were able to find the right SA at the right store on the right day? It's crazy.

As for the forum traffic, I think there are a lot of new people on here who like the new Vevers styles. I have seen a lot of new posters here.

I think quite a few Coach customers, who used to pay full price and/or buy during pce and repeatedly saw their bags go to outlet in less than a month, have moved away from the brand. I have almost done this several times, and I buy much less Coach than I used to because of Coach's crazy policies. I post much less often than I used to, and I can see myself drifting away from the brand again or at least the forum, if Coach continues its crazy policies.

But I also think that the dynamic on this forum of "stress" between some (certainly not all) of the outlet lovers and those of us who are willing to pay full price or buy at pce price has scared some long time members of the forum away. I know quite a few former members of this forum who have moved away from the forum and/or moved onto other brands because they didn't want to experience the negative dynamics on this forum when they bought a bag at full price. They just wanted to enjoy their bag and share it with others who had the same passion for bags and they found other forums and other ways to do that. I have kept in touch with them on other brand forums or run into them on other sites and listened sympathetically to why they no longer participate here.

As for me, I only post to the threads that interest me, and I really do like the Dakotahs and a few of the other Vevers styles so I have stuff to say about the current lines. That is why I am still here.

 

[pslpursemom]

I mainly shop at SCP and most of the time traffic is pretty light. Not like in the "old" days when you had to wait to talk to your SA because she was so busy.



The other telltale sign of Coach's flagging popularity is the traffic in this forum. It used to be busy all the time, now, not so much.

I have to agree. The forum seems practically dead now. I used to have to check multiple times a day just to try and keep up, now I can miss for a few days and the threads haven't been updated. I used to shop Coach like crazy and post quite a bit, I just lurk now, I haven't bought any Coach in months. I don't plan on buying anything until the holidays or after at a deep discount. I don't like the Vevers stuff and especially at the retail prices, it's not happening.

 

[tonij2000]

But I also think that the dynamic on this forum of "stress" between some (certainly not all) of the outlet lovers and those of us who are willing to pay full price or buy at pce price has scared some long time members of the forum away. I know quite a few former members of this forum who have moved away from the forum and/or moved onto other brands because they didn't want to experience the negative dynamics on this forum when they bought a bag at full price. They just wanted to enjoy their bag and share it with others who had the same passion for bags and they found other forums and other ways to do that. I have kept in touch with them on other brand forums or run into them on other sites and listened sympathetically to why they no longer participate here.

As for me, I only post to the threads that interest me, and I really do like the Dakotahs and a few of the other Vevers styles so I have stuff to say about the current lines. That is why I am still here.

I wish people would just report the offending posts and block the offending poster(s) and let the mods deal with the troublemaker(s) instead of leaving the board.

 

[Luv2Shop1]

I wish people would just report the offending posts and block the offending poster(s) and let the mods deal with the troublemaker(s) instead of leaving the board.

Totally agree!

 

[ltbag]

I wish people would just report the offending posts and block the offending poster(s) and let the mods deal with the troublemaker(s) instead of leaving the board.

Me too. But they have left already and I was just describing why we don't see as many of the long term members around any more.

 

[Luv2Shop1]

I have to agree. The forum seems practically dead now. I used to have to check multiple times a day just to try and keep up, now I can miss for a few days and the threads haven't been updated. I used to shop Coach like crazy and post quite a bit, I just lurk now, I haven't bought any Coach in months. I don't plan on buying anything until the holidays or after at a deep discount. I don't like the Vevers stuff and especially at the retail prices, it's not happening.

Yep! I used to check multiple times a day too...now I have to find other things to do!

I was off the brand for a while, sold a lot of my bags and moved on. The Borough brought me back and I have a couple of things I am interested in. The thing is, I am reluctant to buy FP because if the bag ends up at department stores on sale I will be annoyed. So I don't buy as much as I would if there was a PCE.

 

[accessorygirl2]

I'm still picking up outlet deals from the past few seasons. I like some of the new items, like Crosby and Rhyder, but I am not likely to order from fp since there are no stores nearby where I can see the new items in real life. I used to order from fp quite often with pce when I lived in Maryland. I have no desire to buy these bags without a discount. I'll hold out for a SAS or some kind of end of year promo.

 

[Luv2Shop1]

I have no desire to buy these bags without a discount. I'll hold out for a SAS or some kind of end of year promo.

+1

 

[whateve]

Yep! I used to check multiple times a day too...now I have to find other things to do!

I was off the brand for a while, sold a lot of my bags and moved on. The Borough brought me back and I have a couple of things I am interested in. The thing is, I am reluctant to buy FP because if the bag ends up at department stores on sale I will be annoyed. So I don't buy as much as I would if there was a PCE.

Agreed, the forum is very slow. I've noticed that a lot of new members will buy lots of bags in a relatively short period of time, then they inevitably have to slow down. If you aren't ready to purchase another bag, either you have less interest in reading threads about them or you don't want the temptation.

 

[ArmCandyLuvr]

But I also think that the dynamic on this forum of "stress" between some (certainly not all) of the outlet lovers and those of us who are willing to pay full price or buy at pce price has scared some long time members of the forum away. I know quite a few former members of this forum who have moved away from the forum and/or moved onto other brands because they didn't want to experience the negative dynamics on this forum when they bought a bag at full price. They just wanted to enjoy their bag and share it with others who had the same passion for bags and they found other forums and other ways to do that. I have kept in touch with them on other brand forums or run into them on other sites and listened sympathetically to why they no longer participate here.

I had something similar happen to me. I bought a bag for full price, revealed it here, and some commented that the bag would be going to the outlets soon. As tempting as it is sometimes to wait a bag out and possibly score a better price, I had no guarantee that would happen, so I figured I had better just get it if I really wanted it that badly. Heck, I remember when Coach had their Semi Annual Sale, some were already talking about waiting to see those bags go to the outlets in hopes they would be marked down even more, as if getting 50% off wasn't a decent deal. Some of those bags did go to the outlets, but they were still only 50% off as far as I recall. It was slim pickings by that point. I like a good bargain as much as the next gal, but I wouldn't diss a person for paying full price if they really wanted the bag and didn't want to risk missing out on it.

 

[missmoimoi]

I had something similar happen to me. I bought a bag for full price, revealed it here, and some commented that the bag would be going to the outlets soon. As tempting as it is sometimes to wait a bag out and possibly score a better price, I had no guarantee that would happen, so I figured I had better just get it if I really wanted it that badly. Heck, I remember when Coach had their Semi Annual Sale, some were already talking about waiting to see those bags go to the outlets in hopes they would be marked down even more, as if getting 50% off wasn't a decent deal. Some of those bags did go to the outlets, but they were still only 50% off as far as I recall. It was slim pickings by that point. I like a good bargain as much as the next gal, but I wouldn't diss a person for paying full price if they really wanted the bag and didn't want to risk missing out on it.

I've been in the same boat with this brand in the last 3 years or so. Year after year, I don't necessarily find "must have" Coach bags but when prices were $398 to $450, it wasn't so awful to pay FP...although I learned that sales keep happening! So even then, without big outlets nearby (I'm in Vancouver, BC, Canada) some gorgeous bags wound up discounted at The Bay for $250 but yeah, you can never count on that especially not up here (in Canada). Now that the prices have shot up, I'm being careful. Having said this, I paid FP for the red nubuck Rhyder 33