• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

'The demographic dividend of the last 40 years is ending': J.P. Morgan says the world is running out of the two things that kept interest rates down

2

Jensen Huang made his $172 billion fortune on AI chips. His family's $75 million gift to Vanderbilt argues art decides what technology is for

3

The millennial generation is split in 2: an older crowd with boomer-style comfort, a younger set going 'back to the early 1900s'

1

'The demographic dividend of the last 40 years is ending': J.P. Morgan says the world is running out of the two things that kept interest rates down

2

Jensen Huang made his $172 billion fortune on AI chips. His family's $75 million gift to Vanderbilt argues art decides what technology is for

3

The millennial generation is split in 2: an older crowd with boomer-style comfort, a younger set going 'back to the early 1900s'
Retail

Coach Is Regaining Its Upscale Luster by Dropping Department Stores

Phil Wahba
By
Phil Wahba
Phil Wahba
Senior Writer
Down Arrow Button Icon
Phil Wahba
By
Phil Wahba
Phil Wahba
Senior Writer
Down Arrow Button Icon
November 1, 2016, 3:21 PM ET
General Images of Economy Ahead Of Nationwide Quarterly Land Price Data Release
Photographer: Kiyoshi Ota/Bloomberg via Getty ImagesPhotograph by Kiyoshi Ota — Bloomberg via Getty Images
Add Fortune on Google for similar content.

Luxury is supposed to be about scarcity.

But in recent years, chasing after sales growth, many so-called accessible luxury brands including Coach (COH) have gone after all the distribution they could find, opening shops at hundreds of department stores as well as adding to their own locations.

The result of that ubiquity in many cases has been a damaged brand and loss of control over how merchandise is presented.

Coach, in turnaround mode, is now subscribing to the less-is-more approach. The fashion brand is in the process of exiting some 250 U.S. department stores, to focus on those retailers’ best locations and on its own fleet of stores. And it’s paying off.

Coach on Tuesday reported a 2% increase in North American comparable sales for its most recent fiscal quarter, the second such period of growth after years of sharp declines. Total sales for the quarter rose 1% to $1.04 billion.

“We are pulling back on distribution because I think the footprint we were in was just bigger than where the brand is,” Coach’s North American president, André Cohen, told Fortune.

In July, the company announced it would remove its products from about 25% of the roughly 1,000 wholesale locations where Coach currently sells its goods in North America. It also said it would reduce the markdowns that Coach allows department stores to take, concerned by the high level of promotions those stores are employing to try to stanch their own sales bleeding. Macy’s (M), Coach’s single biggest department store partner, has reported declining sales for six straight quarters. Nordstrom (JAN) has similarly been struggling.

“The constant discounting in department stores was affecting brand perception,” Cohen said.

Ralph Lauren (RL) and Lacoste are among the many brands to express frustration with the barrage of brand-eroding promotions at department stores.

Coach was seduced by the logo craze of a few years ago that had so much of its merchandise festooned with the word “Coach” or letter “C,” as well as the boom in discount factory stores that sent sales soaring. Coach felt that the factory-store surge helped it compete against fast growing rivals like Michael Kors (KORS) and Kate Spade (KATE) during the handbag boom earlier this decade. But that growth came at a cost: Coach came to be seen as a brand for masses attracted to gaudy handbags, rather than as a maker of quality, elegant leather goods with history going back to 1941.

 

 

The company is in the middle of a five-year turnaround plan drawn up by CEO Victor Luis soon after he took the reins in 2014. That has included shutting 20% of Coach’s stand-alone stores, the better to focus on its best-performing stores in key markets.

That plan has involved other steps such as reducing the number of online sales events in its factory store business, and reinventing itself as a so-called “lifestyle” brand, whose offerings go far beyond its staple shoes and handbags to include a wide array of outerwear and apparel. Coach is in the process of remodeling many of its stores, incorporating a sleeker look that is more upscale. And it has become a fixture at fashion weeks to showcase work by its star designer, Stuart Vevers.

At some stores, Coach has opened “craftsmanship bars” to showcase the workmanship that goes into the 75-year-old brand’s wares.

The result: Coach has been regaining some of its old upscale cred, hurt in recent years by many garish and cheap-looking, logo-festooned items. Now handbags that cost $400 or more generate more than half of that category’s sales, up from 30% a year ago. And favorable perception scores are up to 80% now, from 70% a year earlier.

“We are, at the highest levels, moving from the lowest common denominator in pricing to a more innovative, more emotional positioning that provides consumers something they can’t find elsewhere,” Luis told Fortune.

About the Author
Phil Wahba
By Phil WahbaSenior Writer
LinkedIn iconTwitter icon

Phil Wahba is a senior writer at Fortune primarily focused on leadership coverage, with a prior focus on retail.

See full bioRight Arrow Button Icon
Add Fortune on Google for similar content.

Latest in Retail

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • TikTok icon
  • YouTube icon

Latest in Retail

t
EconomyInflation
Meet the Americans learning to go without after the biggest grocery inflation in 50 years
By Dee-Ann Durbin, Terry Tang, Maggie Scales, Sandy Guatibonza, Hikari Mae Hida and The Associated PressJuly 25, 2026
4 hours ago
g
EconomyInflation
‘Rockets and feathers’: Economists say grocery prices shoot up like the first, fall like the second
By Dee-Ann Durbin and The Associated PressJuly 25, 2026
4 hours ago
alex
CommentaryEntrepreneurship
I sold my startup for millions without a single dollar in revenue. Here’s why that’s the point
By Alexander Kardos-NyheimJuly 25, 2026
10 hours ago
Photo of retailer Wildberries
PoliticsUkraine
Ukraine’s drone strikes on Russia’s Amazon rival’s warehouses hit military supply chain and shake public morale
By The Associated Press and Dasha LitvinovaJuly 24, 2026
1 day ago
shop
EnergyInflation
Oil at $100 is pushing up costs from gas pumps to grocery aisles
By Cathy Bussewitz, Mae Anderson, Anne D'Innocenzio and The Associated PressJuly 24, 2026
1 day ago
craig
CommentaryPharmaceutical Industry
Big pharma’s patent cliff meets a new biotech Cold War: We need to outrun China, not outlaw it
By Craig GarthwaiteJuly 24, 2026
1 day ago

Most Popular

'The demographic dividend of the last 40 years is ending': J.P. Morgan says the world is running out of the two things that kept interest rates down
Economy
'The demographic dividend of the last 40 years is ending': J.P. Morgan says the world is running out of the two things that kept interest rates down
By Eleanor PringleJuly 24, 2026
1 day ago
Jensen Huang made his $172 billion fortune on AI chips. His family's $75 million gift to Vanderbilt argues art decides what technology is for
Big Tech
Jensen Huang made his $172 billion fortune on AI chips. His family's $75 million gift to Vanderbilt argues art decides what technology is for
By Sydney LakeJuly 23, 2026
2 days ago
The millennial generation is split in 2: an older crowd with boomer-style comfort, a younger set going 'back to the early 1900s'
Real Estate
The millennial generation is split in 2: an older crowd with boomer-style comfort, a younger set going 'back to the early 1900s'
By Nick LichtenbergJuly 25, 2026
6 hours ago
The $39 trillion U.S. national debt isn’t as high as Japan’s and Singapore’s relative to economy size—and yet it's still worse somehow
Economy
The $39 trillion U.S. national debt isn’t as high as Japan’s and Singapore’s relative to economy size—and yet it's still worse somehow
By Sasha RogelbergJuly 23, 2026
2 days ago
Current price of oil as of July 24, 2026
Personal Finance
Current price of oil as of July 24, 2026
By Joseph HostetlerJuly 24, 2026
1 day ago
Current price of silver as of Friday, July 24, 2025
Personal Finance
Current price of silver as of Friday, July 24, 2025
By Joseph HostetlerJuly 24, 2026
1 day ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.