Sweetening The Purse
Monday, September 3, 2007
Before there was flushed-faced longing for Balenciaga shoulder bags and status in carrying a Chloe Paddington, before Miuccia Prada transformed a nylon backpack into a symbol of wealth or the Fendi baguette became a plot point on "Sex and the City," there were Coach handbags.
Understated, sturdy and utterly lacking in sex appeal, Coach bags are known for being indestructible. Even today, longtime fans tell of decades-old bags that are still in use. A 10-year-old briefcase still accompanies one Detroit entrepreneur to the office. Another handbag survived the violent tugging of a mugger and several months lying waterlogged in a trashcan in Washington.
Until recently, Coach's most glamorous moment came in 1980 when the bags were cited in "The Official Preppy Handbook" -- and throngs of preppy wannabes started carrying Duffle Sacs and popping the collars on their Lacoste shirts.
But in the past 10 years, Coach has become one of the fashion industry's most dynamic success stories. While new designer names such as Proenza Schouler and Zac Posen paint glamorous fantasies, Coach occupies a highly profitable reality.
With the arrival of its first creative director, Reed Krakoff, in January 1997, Coach began to transform itself from a $500 million manufacturer of reliable and tasteful purses into a $2.6 billion company that has its name on shoes, furniture, luggage, outerwear and, most important, bags. They represent 56 percent of the company's business.
The typical consumer would be forgiven for assuming that handbags are mere flourishes in the fashion economy. But that hasn't been the case for a long time. Accessories appeal to the broadest range of consumers and offer the widest profit margins. It's the hobo bags that rake in the big bucks, not the boho skirts.
The company, founded in 1941, has experienced double-digit growth over the last 10 years. Much of that growth has been due to Krakoff's ability to translate imprecise notions about American style, classic silhouettes and a modern sensibility into products, transforming Coach from a utilitarian purchase into a fashion one.
"Brands are like people," Krakoff says. "They have tendencies, things they will do and things they can't do."
Like a lot of his customers, Krakoff, 43, grew up in Connecticut at a time when Coach epitomized East Coast preppy style. Women he knew carried Coach Duffle Sacs. He had a Coach wallet. And Krakoff had been steeped in the marketing of Americana after spending more than a dozen years working for designers Ralph Lauren and Tommy Hilfiger.
In price, the company's handbags are situated between the fancy designer bags that typically start at about $1,000 and the mass market handbags, from companies such as Nine West, that top out at $100 or so. The average sale in a Coach store is $325. Depending on one's income and point of view, Coach manages to be both a luxury and a bargain.
"Coach bags look and feel substantial, and they last as long as you want them to," writes Karen Pierce, 41, a Washington lawyer, in an e-mail. "I noticed a few years ago that the look was different -- more colors, more details, more style. . . . I also like the price point -- it's reasonable for the quality and the look, especially compared to higher-end designer bags."