Coach is getting a makeover, and it is not terribly unlike what Louis Vuitton is doing. Both brands have experienced some seriously unfavorable side effects of chasing profits and essentially loosening the reigns on their luxury status (afford 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.
To combat this, Coach is re-vamping its advertising (hey Karlie, Liu Wen, Arthur Gosse and FREJA BEHA ERICHSEN), bringing in an amazing new creative director (what up, Stuart Vevers), upping prices, and largely cutting out that god-awful “C” print that long-dominated its offerings. 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. Just how many? Well, 100 (or more) over the past year. The U.S. based accessories brand, which now also boasts a Ready-to-Wear collection, has slapped thousands of defendants (some named but more identified by domain name) with trademark infringement lawsuits in federal courts all over the U.S. 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.
Sure, Coach has been awarded some big judgement amounts. Last year, the brand was awarded $257 million in damages in one case, and $44 million in another – just to name a couple. But, as we have told you in the past, the damage awards in online counterfeiting cases are almost never collection in their entirety. In the U.S., government initiatives, such as “Operation In Our Sites,” have been put in place to recover funds (such as money in the defendants’ PayPal accounts), but even these do little to collection large sums of money. So, the benefit from these lawsuits seems to be injunctive relief (meaning the websites must cease operations) and ownership of the domain names on which the infringing goods were being sold.
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 LVMH brands, 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 …