At its peak, Coach was one of the top contemporary brands. Their handbags with the large CC logos were a must-have item for all fashionistas in the early-2000s. Following its increased popularity, the brand began to expand its presence by opening mall locations, freestanding boutiques and outlet stores, but as with most companies that jump the gun on expansion efforts, Coach found itself over saturated. The perceived value of the brand began to quickly diminish.
It’s fairly similar to what is happening to the Michael Kors brand today. No one wants to tote around a handbag that millions of other people are rocking.
Consumers want something new and fresh – a status symbol that is unattainable to most. And thus, Coach’s domination began to diminish to the point that shoppers were likely to see a Coach handbag being sold at their local TJ Maxx. It was the ultimate kiss of death.
In the fashion world, trends come and go until they make their way full circle again. The same isn’t true when it comes to fashion houses. Once the “cool factor” has worn off for a brand, it’s extremely difficult to reclaim the hearts of fickle shoppers. Jordache Jeans, L.A. Gear and Juicy Couture are three companies that can attest to this.
Coach isn’t willing to give up without a fight. The brand has taken strides to regain its place as one of the top brands in the fashion and accessories industries, but they don’t have their eyes set on the contemporary market this time around.
Instead, Coach is after the big fish – the high-luxury shoppers. A new creative director, Stuart Vevers, is in place to crank out designs that high-end shoppers crave: a hodgepodge of colorful, furry coats for spring, and 70s-inspired shearling coats for fall.
The brand’s pricing structure was immediately revamped to correlate with its new high-end aspirations. The spring collection was priced from $295-$1895 – a significant increase for the brand’s longtime contemporary clientele.
The consumers responded by showing their distaste for the new pricing by hitting Coach where it hurts: their pockets. The new restructuring has led to a 10% decline in sales after the end of 2015’s first fiscal quarter.
Sales have dropped from $4.81 billion in 2014 to $4.19 billion in 2015. The devastating slide in sales has created a domino effect of devastating changes to the company. 70 North American Coach stores have closed shop, and all of its part-time employees at its 36 Canadian stores were laid off.
Despite it all, Coach claims the decline in sales was expected, and they won’t let the brand’s struggles hinder them from moving forward on their quest to dominate the luxury market.
The company will make its first ever debut at New York Fashion Week in September with their sights set on picking up some new wholesale accounts and catching the eye of luxe shoppers.
It will be interesting to see if their NYFW runway show will be enough to save the failing brand.