You can never be too popular. Or can you?
I have been a Coach customer for a long, long time. I purchased my first bag with my own money in the mid-eighties, and felt like it was a rite of passage. I was finally beyond department store brands – I owned a Coach bag. Built to last forever. Leather that just looked expensive. And a style that was classic. I still have that bag, and I still carry it now and then. It’s so nostalgic. I’m sure I don’t own as many Coach products as some people, and more than others. I currently own five Coach handbags, one zip-top makeup bag, two wallets and a key fob. My latest handbag is shown here, a Christmas gift from The Bob.
My nose started turning up at Coach when they introduced their signature fabric some years back. I was aghast at the wild colors. How dare they change? British tan forever! When they added other accessories I became worried. What were they doing to “my Coach?”
It has taken me a while, but now I get it. They were about creating a successful brand, and a lifestyle, that was in step with what consumers really want now. Viva Coach! A Coach leather key fob shaped like a monkey? How fun! Bring it on!
But now, I am worried for a different reason. According to some analysts, Coach may have become “too popular.” According to this article in Business Week, Coach’s second quarter fiscal sales were phenomenal. Mind blowing. Off the chart. Record breaking. “Sales at stores open at least a year soared a whopping 25.7%, leading to a 31% increase in profit.”
How is that a bad thing? According to the report, most of the surge in sales was from discount factory stores. Not their primary retail outlets. People want Coach bags at a low price, and are willing to buy last year’s styles or even irregular items just to have the little dangly tag that says “Coach.”
Retail investors remember how Calvin Klein and Tommy Hilfiger lost the shine on their images when they flooded the discount market. Image is clearly an issue among upscale brands. Tiffany’s (TIF), for instance, decided to increase the price on its hugely popular silver jewelry items, fearing that huge sales will tarnish its upscale image.
As scary as that sounds, there are analysts on the other side saying that Coach knows what they’re doing. Their growth is based on solid consumer research – giving consumers what they want now, and what they’ll want three months from now. Let’s hope. Because I’m lobbying hard for another Coach handbag from The Bob.
Coach, Coach Handbags, Coach Sales, Coach Stores
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