Coach Leather Bags - Coach Soho Bags 2007 2008 - Handbags at Coach - Authentic Coach Soho Bags

TOKYO — Walking down a street in Tokyo, it doesn't take long to see women clutching Coach bags.
The New York-based maker of fine leather goods is succeeding where other U.S. companies have struggled, winning over finicky Japanese customers who have long preferred European and homegrown brands.

With more than 100 retail outlets in Japan, Coach's sales tripled in the past three years to about $270 million.

Business in Japan now makes up more than a fifth of the company's global sales.

Japanese buyers are passionate about the leather and fabric bags and totes.

"I've always wanted a Coach bag," said Akiko Yamaguchi, a university student visiting a Coach store with her mother, who bought two bags for her daughter's 20th birthday. "I'd like to buy lots more if I can."

Coach is so popular that when it recently opened a store in the northern city of Sapporo, dozens of women lined up to be among the first to set foot in the shop.


KOJI SASAHARA / AP
Coach Chief Executive Lew Frankfort, center, with Coach Japan President Ian Bickely, speaks about the company's fall collection during a visit this month to Tokyo.


Known for its craftsmanship, Coach is the No. 2 imported bag and accessory brand in Japan in sales, trailing France's Louis Vuitton, a favorite for decades. Coach sells in department stores and has four flagship boutiques devoted to its products, with two more opening this year.

"We have a unique brand proposition. We are an accessible luxury accessories brand in which we offer extremely well-made products that are relevant to Japanese consumers' lifestyles at very attractive prices," Coach Chief Executive Lew Frankfort said during a recent visit to Tokyo. "We think the opportunities are abundant."

Coach keeps prices down — as much as a half or a third of European rivals — by maintaining low-cost suppliers and producing the bags in Chinese plants where workers are trained and supervised by Coach to maintain quality.

Still, the bags are not cheap, giving them the luxury-goods aura Japanese shoppers demand.

A Coach tote costs about $700, but smaller bags cost about $400.

It has also helped that the Japanese culture is brand-conscious. Even in the samurai era, people kept abreast of fashions, coveting brands in noodles, kimonos and bonsai plants.

Being out of touch with what's hip is potentially embarrassing in Japan and even costly for your career.

The brand loyalty often backfired on many U.S. companies trying to break into the Japanese market, although the Gap, Coca-Cola and Disneyland have been huge hits. Ford, Burger King, Gateway and Dunkin' Donuts haven't found Japanese buyers as welcoming.

"Coach is a case study in cracking the Japan luxury market," said Naomi Moriyama, president of New York-based The Moriyama Group, marketing consultants.

"Coach is winning in Japan because of intensive consumer research, superb product quality and customer service, stunning new stores and a constant flow of new products."

Japanese are snatching up Coach bags not only in Japan but also abroad as tourists. The same handbags are cheaper overseas because of Japanese taxes on imports and the costs of shipping and store space in Japan.

Some Japanese women say their loyalty to the Coach brand developed during shopping trips abroad.

Moriyama said Japan is filled with serious "power-shoppers," who see collecting brands as critical for status and self-expression, accounting for 40 percent of the world's luxury sales.

Many are single women who live with their parents, but a growing group of brand-conscious "power seniors" and women executives is likely to keep Japan an important luxury market for years, Moriyama said.

Stuck in small, cramped homes, Japanese tend to splurge on things like bags rather than larger goods like fancy furniture.

A Japanese woman spends four times her U.S. or European counterpart on accessories, according to Coach.

To keep its image fresh, Coach changes its offerings every month. Eye-catching bags, like this fall's collection that has a metallic sheen, are prominently displayed on counters.

Coach stores have huge glass walls to send that "accessible luxury" message. And the doors are open, unlike some of the European brands that exude exclusivity with doormen guarding the entrance.

But it's not just the cachet that has won over Japanese shoppers. The same qualities that have appealed to Americans are luring Japan's consumers.

"The leather on Coach bags is so soft, and the designs aren't as cluttered as other brands," said Shizuyo Sakabe, 47, a housewife who owns a Coach bag and wallet.

She summed up the feelings of many others: "I love Coach."