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    You can’t kill Coach

    Coach; Chelsea Jia Feng/BI

    Throughout the early aughts, my purse of choice was a brown wristlet covered in monogram Cs.

    The wallet-sized bag was, of course, from Coach — or at least designed to look like it was. (I’m pretty sure my aunt bought it from a street vendor in New York City.) But the accessory’s impact was all the same.

    Whenever I pulled a few dollars out of my imitation bag to buy a candy bar or CD, I felt like Paris Hilton and the other celebrities I’d read about in teen magazines.

    Unfortunately, the brand had lost most of its appeal by the time I reached adulthood and could afford a real Coach purse. Its famous letter pattern looked especially outdated.

    Old and new Coach patterns styled together.

    Gilbert Carrasquillo/Getty Images

    So, it was shocking to me and other millennials when Coach staged a successful comeback.

    Seemingly overnight, the brand’s old-school magazine advertisements were replaced with eye-catching TikToks, its unknown models stepped back to make room for stars like Lil Nas X, and its famous neutral bags were pushed to the side for cute, cherry-print purses that Gen Z loved.

    The rebrand, which started in 2020, worked instantly and is still boosting sales four years later. Tapestry, the label’s parent company, reported Coach as its top earner during the second quarter of 2024 with $1.54 billion in revenue — a 7% increase compared to last year.

    And if you speak with any Coach fan about why they like the brand, those numbers won’t surprise you.

    “A lot of us are looking for an it-brand to wear that isn’t totally going to break the bank but is still very cute and high quality. And that’s Coach,” Erin Keel, a 26-year-old fan from Los Angeles, told Business Insider.

    The origins of a legacy brand

    Coach, founded by six artisans in 1941, started as a small leather goods company that crafted wallets. It eventually grew with the help of Lillian Cahn and Miles Cahn, who purchased the business in 1961 and renamed it the Coach Leatherware Company. Lillian was responsible for introducing handbags to the brand.

    The work of designer Bonnie Cashin was especially popular in the brand’s earlier days. She added the now-famous turnkey hardware to various Coach designs and was responsible for crafting a purse that mimicked paper grocery bags. The piece has long been coveted, with Coach selling refurbished Cashin Carry Totes on its site today.

    Lew Frankfort, who joined Coach as vice president in 1979 and became CEO in 1995, transformed the company into the American fashion house we now know.

    Mandy Moore carries a Coach bag in 2006.

    Michael Loccisano/Getty Images

    He did so by making Coach a cultural touchstone.

    In the late ’90s and early 2000s, the brand’s monogrammed purses in tan colorways were the epitome of luxury. They were everywhere — from celebrities’ arms to red carpets.

    But by the 2010s, profits and interest were dropping — something experts then cited to high prices and the elimination of coupons, which later forced Coach to discount items heavily.

    Competitor brands like Michael Kors and Kate Spade swept business from Coach around 2014, and Frankfort stepped down from his role as CEO that year to become executive chairman.

    With Victor Luis now at the helm, the brand’s choice to pull its focus from department stores in 2016 also led to further sales declines. And with fewer people buying Coach bags, consumer ideas of the brand shifted.

    Keel, who purchased her first Coach accessory — a discounted cardholder from Coach Outlet — around that time, remembers the change in the brand’s perception vividly.

    “I was at a party, and I overheard a girl talking about how she had a bunch of designer bags, like Chanel and YSL,” she told BI. “Then I heard her say that Coach wasn’t really designer and that it was only for people who were broke.”

    “My face went bright red, and I just felt so embarrassed,” she continued. “I remember clutching the cardholder in my hand, trying to cover the fact that it was Coach.”

    Coach, eight decades later

    Thanks to the brand’s overhaul, hearing such a strong take on the legacy brand today would almost feel preposterous.

    After two leadership changes — Luis was ousted in 2019, and his successor, Jide J. Zeitlin, left in 2020 — Todd Kahn joined the brand.

    Under his leadership, Coach returned to its glory days. It began relying heavily on digital marketing across TikTok and Instagram, where its Tabby design eventually took off and became an it-bag of 2023.

    One advertisement, in particular, grabbed consumer heartstrings as Lil Nas X, Camila Mendes, and other celebrities opened their Tabby bags to reveal their inner thoughts and “emotional baggage.”

    Last year, the fashion house also launched Coachtopia, a sub-brand focused on sustainable accessories and creative designs, many of which cater to Gen Z consumers.

    The above efforts were flawlessly executed and almost immediately successful. Tapestry reported that Coach sales increased by 11% in the third quarter of 2023. The parent company’s most recent report said Coach had acquired 1.5 million new North American customers in the second quarter of this year.

    Beth Goldstein, a Circana fashion analyst specializing in accessories, told BI that while fashion is cyclical, it’s not necessarily common for a brand to come back as strongly as Coach has in recent years.

    “The brand did a good job when it said: OK, we need to reset this supply and demand equation, and we need to pull back from retailers that are not doing our brand any favors,” she told BI of the brand, noting their discounted products at department stores and other retailers. “And they did that at the expense of sales, but they focused on brand equity and the product and put those two things first.”

    The multi-generational approach

    At the core of Coach’s success, of course, is its fan base.

    As Tapestry stated in its latest report, many of Coach’s original millennial customers are still around, but much of the company’s comeback can be credited to Gen Z.

    Keel purchased her first Coach purse in 2021 and now has a collection of nearly 20 bags. She regularly posts social media content about her collection and is particularly drawn to Coach’s sustainability efforts, its wide range of bag styles, and high-quality products.

    “I like Coach because it’s trendy but still very timeless,” Keel told BI. “And they come out with a lot of different, fun pieces frequently throughout the year, so it’s something you never get bored of.”

    “Nostalgia is one of the most powerful marketing tactics.”

    Customers are drawn to more than just new, trendy pieces. Old Coach designs are also seemingly impacting the brand’s current business.

    As the brand previously shared on Instagram, its Tabby bag was inspired by a 1970s Coach design. In June, it also relaunched its Swing Zip bag, which first went on sale in 1998.

    Kate Bauer, a 29-year-old from Toronto, collects vintage Coach bags that she exclusively buys secondhand. She told BI that the importance of old Coach styles to the brand’s current business has never been clearer.

    “Nostalgia is one of the most powerful marketing tactics, and Coach has done a really good job of creating new bags that reference old ones,” she told BI. “And that consistent aesthetic has been instrumental in keeping the brand at the forefront of people’s minds.”

    When I entered one of the brand’s boutiques earlier this month, I felt two time periods colliding.

    The shop’s brown walls, warm lighting, and glass cases screamed 2006. So did the few monogrammed wristlets I saw displayed on mannequins. Still, the Tabby purses that lined each shelf brought me back to 2024.

    It became clear that the recipe for Coach’s comeback was much simpler than I originally thought. The brand didn’t need to change much. It simply needed to grow up and get with the times.

    Coach’s Tabby bags are some of its most popular.

    Edward Berthelot/Getty Images

    Can the Coach comeback last?

    Goldstein noted that it’s a “natural progression” for most fashion and accessories brands to have ups and downs.

    She said Coach’s ongoing success story is a little less common, but other Y2K brands, specifically Crocs and UGG, have staged similar comebacks recently and made them last.

    All three brands, Goldstein noted, expanded the ranges of their classic products to include more unique styles.

    “They all focus on individuality and inclusiveness,” Goldstein said of Coach, Crocs and UGG. “They offer a message of ‘you be you’ and sell products that consumers don’t already have.”

    Like any company, Goldstein said, Coach and similar brands need strong management to leverage future success. A consistent focus on consumer interests and new ideas is also key.

    “I don’t think any one brand can be as big as it ever was before because there’s too much competition now,” she said. “But I do think that Coach absolutely has lasting power.”

    Read the original article on Business Insider

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