Consumers are actually buying Coach bags again. Following a wildly successful heyday in the 1990’s, Coach’s revenue was torpedoed by consumers' logo-fatigue, its over-reliance on department stores as retail outlets, the increased attractiveness of fellow accessible luxury players (such as Michael Kors), and a distinct change in positioning. Coach went from touting itself as "a leading marketer of modern classic American accessories” to a brand known for its "modern luxury accessories,” thereby removing any sense of aspirationality from the equation.
For a while, Coach's mass-market, mall-centric strategy worked, and its sales lurched to $5.1 billion in 2013. But that revenue boost did not come without strings attached. As Coach was chasing billions as a lifestyle brand under the watch of superstar designer Reed Krakoff, its reputation as a maker of quality, classic, even-elegant leather goods with roots that go back to 1941 when Coach got its start as a small workshop in Manhattan’s Garment District was being obliterated. By 2015, annual revenue was down by nearly $1 billion, and Coach’s upscale image was a memory.
Since then, the brand has been working overtime at an overhaul. For starters, it enlisted creative director Stuart Vevers, who joined the New York-based brand in 2013 from his position as creative director of LVMH-owned Loewe.
In his time at the helm, Vevers has built, as WWD’s Bridget Foley put it, “a strong, engaging identity for the brand, grounded in his outsider’s fascination with the American West.” His ready-to-wear is compelling and cool, oftentimes in a slightly off-kilter, nostalgic way. The stars associated with the brand – including Selena Gomez, Japanese-American superstar actress Kiko Mizuhara, and Milly Bobbie Brown – are buzzy. The handbag offerings are quite striking and minimally logo-ed.
Victor Luis, the brand’s CEO since early 2014, is also helping to impart change by repositioning the brand from an over-exposed mall staple to a modern luxury brand, with a focus on reposting and global expansion to bolster the once-struggling business. This has included closing over 100 stores in the U.S. and backing out of department stores. As of late 2016, Coach was in the process of exiting some 250 U.S. department stores, and focusing, instead, on a smaller pool of better-performing department stores and its own network of stores, of course.
“From the very beginning, our strategy has been about the Coach brand being aspirational and having more cachet,” Luis told Fortune in 2016. “Our consistency over the last two years is paying off. Consumers who had left us are beginning to reacquaint themselves with Coach and new, young consumers are finding us relevant.”
And he is right. Coach’s parent company, Tapestry, Inc., reported on Tuesday that while its Stuart Weitzman and Kate Spade brands are struggling , sales of Coach handbags and accessories are up, rising nearly 6 percent on the back of a 3 percent rise in global same-store sales.
“Results were driven by continued growth at Coach, where comparable store sales rose, led by outperformance in North America,” Luis said in a statement on Tuesday.