Coach, the New York-based maker of handbags and leather goods that has been struggling for years, is making a comeback. The company announced last week that comparable sales in its largest market, North America, had not changed from the previous quarter. That was the first time since late 2013 that sales did not decline quarter-to-quarter. Sales are up so far this quarter.
Coach did very well in the past. In the 2000s, the company opened a series of stores in malls and outlets across the country offering its products at a discount. The strategy worked for a while, and Coach had $5.1 billion in sales in 2013.
That strategy was ultimately counterproductive because Coach came to be considered a label for mass consumption, not a luxury designer with exclusive status that had a long history of making quality leather goods. Coach’s reliance on logos and outlet stores hurt its image. Competitors such as Michael Kors and Kate Spade attracted customers who had previously been loyal to Coach. Annual sales declined by almost $1 billion in 2015.
Coach hired Stuart Vevers as its new creative director in 2013. He has earned praise for converting Coach into a lifestyle brand offering clothing, shoes, and coats in addition to handbags. The label now presents collections on runways and will open a flagship store in New York City this fall. Coach bought luxury shoemaker Stuart Weitzman last year.
Victor Luis was brought in as CEO in 2014 after he successfully led Coach’s expansion in Asia. He was charged with restoring Coach’s previous reputation. He sought to do that by making Coach an aspirational brand like it had been in the past.
Coach closed 100 of its stores in North America, or nearly a quarter of its locations, to focus on its best-performing stores. It also dramatically reduced its online outlet promotions.
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