Is popularity a bad thing for Coach?
Being too popular is a bit like being too thin. I know it exists but yet I can't really imagine that it can happen. Far be it from me to take me fashion cues from Businessweek but their article on Coach has me thinking about the brand and where it is headed. They posit that Coach may become too popular and downscale. The accessory company just announced their second quarter earnings which were impressive, a 31% increase in profit. The brand has also recently announced their first fragrance and have branched out into jewelry. Coach which was once a more upscale and slightly stuffy brand is now wildly popular with stores in many malls.But is there a dark cloud on the horizon and does that dark cloud look like the Gap logo? Pallavi Gogoi of Businessweek cites Gap's meteoric rise to popularity which was then followed by ubiquity and a decline in sales. And when Calvin Klein and Tommy Hilfiger popped up in discount stores their prestige level suffered. The key for Coach is to find a balance between rapid expansion and maintaining a certain sense of privilege. With bags like the Hamptons carryall shown here which sells for $378, I don't think Coach is quite headed for Gap t-shirt territory anytime soon.
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Lea, 1-24-2007, 9:06PM
I think the one thing keeping Coach's "prestige" is their price tags. However, malls/cities that don't have a coach store make up by putting them in the local department stores. And what do department stores have? Store credit cards. When people run out of the money to keep up with the trends, they'll quit buying. And when Coach sees the decline in sales, I won't be surprised when the company brings out their own store card to help with those customer needs.
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