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Coach warned consumers of increasing bag prices about a year ago, but now the company's honing its strategy. With the help of new design director Stuart Vevers, the brand is reducing its offering to smaller batches of about 100 styles. A bigger percentage of these will be more expensive status-symbol hopefuls.
For a long time, Coach seemed satisfied catering to your everyday "mass affluents" in the private school carpool with bags that averaged around $300. But the Tory Burches, Kate Spades and Michael Kors of the world have posed steep competition. To set themselves apart, Coach is focusing on selling its craft heritage, while superseding those competitors' price tags (by staying over $600, roughly) and undercutting luxury brands like Burberry and Louis Vuitton (by capping the majority of its bags at the $5,000 mark).
The focus on quality is already shaping Chief Executive Officer Victor Luis' presentation to investors:
Quality, great design, great materials, craftsmanship are all a part of what has made Coach great and what differentiates us from many of our traditional competitors and especially the new accessible luxury competitors that have arisen in the market space. And that's part of our mantra and what we're going to reclaim.The company has been encouraged to make the move upwards thanks to the success of its best-selling bags like the "Weekend Borough Bag," which goes for $1,200. Coach also recently tested the super-expensive market with a collaboration with menswear designer Billy Reid, who biggest ticket item was $20,000. Stuart Vevers' first full bag collection goes on sale this fall, when we'll probably see the changes fully enacted.
· Coach Responds to Falling Sales By Raising Prices [Bloomberg]
· Upon Further Inspection, the New Coach Is Kind of Incredible [Racked]
· That More Expensive Coach Bag? It's Here and It's $20K [Racked]