Well known as being on the affordable end of designer handbags, Coach has become almost iconic when it comes to women's accessories. Coach, Inc. (NYSE:COH), the leading marketer of modern classic American accessories, is making a bad move by going upscale with its bags, jewelry, sunglasses and more. Just earlier this month, it announced an increase of 36% in earnings, but with what I consider to be a wrong turn in marketing that might leave a bad taste in the mouth of loyal consumers, who knows what will happen next.
Coach is rolling out a more exclusive line, called "Coach Legacy" aimed at higher-end consumers. The Coach Legacy line includes an alligator bag (retailing at $10,000), and leather bags that range from $495-795. It also will open concept boutiques in LA and NYC that according to the press release will "feature cream and mahogany awnings with a new horse and carriage logo, unique to the concept store... will be about 1,200 square feet, on one floor with two entrances, and will feature original restored copper façade," in addition other high end "layering of stylized visual and decorative elements will also reinforce the lifestyling of the brand." Except that hasn't been the lifestyling of the brand until now.
From what I gather, this line is focusing on Coach's sophisticated, style innovating and luxury-seeking trendsetters. However, what I think Coach is missing is that for fashion driven women who work hard for their "luxuries", Coach has always been a dependable staple and brand. One that is both attainable and classic.
The recent trend that I have been observing in fashion is designers and stores coming together to make avant garde couture more accessible to the hoi polloi, as exemplified by all the buzz about Target Corp.'s (NYSE:TGT) new Proenza Schouler line. So why would Coach do the exact opposite? Is there something amiss with having working people wearing their bags?
It bodes badly for a company to leave its loyal multitudes of consumers out in the cold, or worse yet, with no arm candy.
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Reader Comments (Page 1 of 1)
2-16-2007 @ 9:31AM
Melon said...
I don't think they are discontinuing what we are used to but rather adding a new $$$ segment (Legacy). There has always been a set of people who can obtain the out-of-our-reach things; and since Coach is now hot with the spenders (the young kid's parents from what I see), they want to go higher to draw the blings and resume their higher class status. I have been saving for a Coach bag, but my 11 year old niece got one from her daddy for Christmas. So ... maybe they have the right idea.
2-16-2007 @ 1:32PM
Chafic Chahine said...
I have been following COH for a while now and back in November I set the price target at $48-$52. Considering the amount of growth COH has seen in the past few months, I don't feel that moving to the higher priced segment is such a bad idea. As Melon mentioned, with the current pricing structure that Coach has, most of their handbags are in reach of almost anyone, even teenagers. On my college campus you see girls carrying Coach bags all over the place.
Coach won't discontinue their current line-up of bags, but they're just making room for expansion to allow for greater organic growth, which is never a bad thing.
2-22-2007 @ 12:21PM
Tracy Wright said...
Coach has a wonderful assortment of bags for a variety of buyers. Keep up the good work!!!!Please visit my website http://granitehardwaredesigns.com for the most amazing granite hardware for your kitchen, baths & closets.
4-05-2007 @ 9:35AM
roble0416 said...
I HAVE BEEN GIVING COACH BAGS FOR SEVERAL YEARS AND WHEN I DO THE LADY'S GO MAD WITH DELIGHT.
I WENT TO MACY'S FLOWER SHOW THIS PAST SUNDAY AND SAW THE DISPLAY AT MACY'S OF COACH AND IT WAS SENSATIONAL. I FEEL THAT I CAN PURCHASE ALL THE DIFFERENT FABULOUS COMPANY'S PRODUCTS AND ALL WOMEN JUST LOVE THE COACH NAME AND COACH WILL GO FORWARD AND UPWARD. BEST WISHES TO ALL NORMAN ROBLES