Thursday, March 02, 2006

The big success of Coach Bags


What started with a simple, glove-tanned leather bag — inspired by a worn baseball glove — has ballooned into a $2 billion enterprise for Coach. That's a lot of hobos and totes.

And while style-conscious fashionistas splurge on high-end designer handbags, à la Carrie Bradshaw on "Sex and the City," the 64-year-old accessories company has quietly generated a sense of brand loyalty based on a whole new handbag category: affordable luxury.

For longtime fan Kitsy Rose of KC Public Relations, the appeal dates to the late '70s, when she played dress up with her mother's black leather Coach tote. Today, Rose has seven Coach bags, including one in pink suede and one in denim, which she calls "guilt-free, affordable pleasures."

She also cites the "durable styles, which are now in bright colors and fabrics."

Alisa Henderson, Star 94's "Super Shopper," is another devotee who uses a Coach bag to carry her bills, daytime planner and phone.

"I bought my first black Coach bag at a garage sale," said Henderson. She also has several other "sturdy and classic" Coach bags, including a suede wristlet for evening.

And while few designer labels strive for durability in their luxury handbags, it's always been a selling point for the leather goods firm. Initially, Coach was known as a classic Manhattan leather house that manufactured small goods — mainly wallets — and crafted its first leather bag 21 years later. While the bags were known for quality, they were conservative; some might even say boring.

But in recent years, Reed Krakoff, Coach's president and executive creative director, has shaped the company's identity as a consumer-friendly option in the handbag market.

A graduate of the Parsons School of Design in New York, Krakoff worked at Tommy Hilfiger and Polo/Ralph Lauren — companies known for their ability to connect with U.S. shoppers — before joining Coach in 1996.

Krakoff's fall designs, which hit stores recently, include trendy mink-trimmed tweed hobos, backpacks in the signature Coach print and leather satchels accented with studs — styles that mirror trends found in Prada, Dior and Fendi this season.

Along with classic favorites, new fall styles retail from about $138 to $800; most Coach bags range from $138 to $398. The line's signature print demi pouch costs $158, compared with Louis Vuitton's $550 signature print pochette.

"The big success of Coach is predicated on the epidemic lust for luxury accessories that swept America the past few years," said New York trend tracker David Wolfe. "What originally began as an in-crowd rage for that black nylon Prada bag became a tidal wave for other designer bags including Fendi baguettes, Chanel chain handles and Christian Dior initials. Of course, the really hot bags were European labels and astronomically priced."

Wolfe added that Coach entered at just the right moment. "The brand redesigned, reinvented and repositioned itself to appeal to a younger, more fashion-aware — though far from cutting-edge — customer," he said.

For Krakoff, there's no concrete method to his design strategy, except to stick to his instinct. "It starts with an idea and quick sketch and develops from there into various categories," Krakoff said via e-mail. "I am constantly sketching and involved in the process [of making a bag] from beginning to end."

He describes his customers as "fun, independent, creative and sophisticated." Those style-conscious women have led to Coach bags and accessories appearing in department stores, online and in more than 375 Coach-operated stores worldwide.

The company has four free-standing stores in the metro area, including a shoe boutique in Phipps Plaza.

Department stores, including Macy's and Parisian, also have Coach departments.

"I think a customer is willing to take a 'risk' on a fashion bag that may be a little different than she is used to," said Macy's handbag buyer Laura Cooper. "But Coach is risk-free. It's high-quality fashion that the customer trusts."

Cooper also points out that Coach has changed the handbag market. At Macy's, which has carried the label for a number of years, Coach is the top seller in the better handbag area, with an average selling price of $230. "Many more moderate vendors copy Coach looks for the following season," she said.

"Coach is an excellent example of being consumer-friendly," said Michelle Bogan, retail strategist with Kurt Salmon Associates. "They tap into the consumer through interviews and surveys. For example, several years ago, women were asking for a weekend bag that was more casual. The result? The Hampton collection now includes a casual weekend bag."

However, older styles, including a 1973 duffel sac, are still an inspiration for Krakoff. Updated versions have become mainstays — in new colors and fabrications — along with the classic leathers.

"Coach is in a unique position," Bogan said. "It's high-profile, and consumers recognize the name. Reed brought in a fresh design perspective and listens to what the customer wants. Coach has evolved as their customers have evolved.

"Their momentum will continue for fall and beyond. They show no signs of stopping."

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