According to our friends over at Purseblog, Coach recently announced that it is going to close 70 under-performing stores in the U.S. in the beginning of next year in favor of flagship stores in major markets, the first of which is said to be New York. The brand's efforts to reposition itself are not just limited to real estate. Since Reed Krakoff left the New York-based brand in April 2013 to focus on his eponymous label, and Stuart Vevers, formerly of Loewe, was appointed to succeed him, change has been underway.
Coach is essentially getting a makeover, and it is not terribly unlike what Louis Vuitton is doing (at least on the surface, as the brands are actually quite different). Both have experienced some the unfavorable side effects of chasing profits and essentially loosening the reigns on their luxury status ("affordable luxury" in Coach’s case) by covering their products in logos, making mass quantities of their accessories, and subsequently, being targeted by a truly enormous amount of counterfeits. The result has been market saturation x 10, which has left a poor taste in the mouths of the consumers they want to target.
In attempts to bounce back, Coach is aiming to focus on ”quality, craftsmanship and the lasting relationships we establish with consumers” and produce ”cool and un-elitist” wares with a level of functionality. It also is take a turn for the high(er) fashion. In addition to significantly cutting down on that all-too-familiar "C" print, the brand has been introducing a variety of sleek leather styles, instead. Moreover, it has been working to reduce its offering to smaller batches of about 100 styles, a greater share of which are “upmarket.” And the heels of upping its advertising campaigns, casting big names like hey, Karlie, Liu Wen, Arthur Gosse and FREJA BEHA ERICHSEN over the past few seasons, Coach plans to introduce a Steven Meisel-lensed campaign come September.
In addition to the store closures and more fashion-forward strategy, Coach is also taking additional steps to re-brand itself as the high end brand it once was. This includes filing a bunch of trademark infringement lawsuits. The legal team at Coach started aggressively policing its trademark (think: 100+ trademark infringement lawsuits last year). The company’s legal team, which has been notoriously active in fighting counterfeits in recent years, has been pretty successful in winning default judgements and claiming the infringing domain names (think: wholesalecoachbags.com and the like). As for how much money they have actually collected from such lawsuits is certainly not as impressive.
As for why Coach has really ramped up its anti-counterfeiting litigation, there are two obvious reasons. One: It is the trademark owner’s duty to police its trademarks (aka locate and investigate unauthorized uses of the mark) in order to ensure that the mark does not lose its distinctiveness and does not become diluted by widespread unauthorized use. Such genericization of a trademark no longer allows that mark to serve as an identifier of its source (part of the underlying theory of trademark law) and is essentially the equivalent of an abandoned trademark.
Two: In addition to the aforementioned legal basis, it is crucial for Coach to reign in such rampant unauthorized use of its trademarks because the existence of an enormous amount of fake “Coach” items on the market (in addition to the number of authentic Coach items) has created a sense of market saturation, which undermines one of the key sentiments of luxury fashion: exclusivity (or at least a sense of it in this case, as Coach is more of an accessibly luxury brand than a high fashion one, and so, the rules aren’t quite as strict, so to speak). Without some sense of unattainability (mixed with appealing design, of course), what is the incentive to buy from Coach as opposed to Michael Kors or any of the other affordable luxury brands? This is where Coach struggles, and where Michael Kors will likely find itself in the not-too-distant future.
Thus, Coach has some work to do. In addition to protecting one of its most valuable assets, its intellectual property, Coach has to rebrand itself and shed the “mall couture” (as we call it) connotation that is currently very highly associated its brand. But what may seem like a battle that was lost before it even started, I’m not sure that’s the case here. Vevers is certainly capable. He seems to be just what Coach needs: a solid resume of high end experience. He has designed for Bottega Veneta, Givenchy, Louis Vuitton, and most recently, Loewe. And also completely reinvigorated leather-goods brand Mulberry, which was what the Los Angeles Times called “a fusty British relic” when he arrived in 2005. Also, with some time, some strong logo-free designs and some outstanding advertising, Vevers may be able to pull this off. My guess is that it will not be as difficult in metropolitan areas, where the truly tacky Coach designs of the early 2000′s are ancient history, save for Canal street. As for whether consumers will be shelling out the “$5,000, $2,000, $3,000″ for a Coach bag as the brand’s CEO Victor Luis hopes, maybe in time.
It seems that while almost everyone is acutely aware of Coach’s not-so-pretty past, there is a common view that the brand is improving. Big-name, high fashion models like Freja Beha and Karlie Kloss certainly help, as does a relatively strong Fall womenswear collection paired with some sleek bags. The work has just begun, but while I would have otherwise thought this brand was D.O.A., there seems to be hope, thanks, in large part, to Vevers. We will see …