Coach has positioned itself as an affordable luxury company with its American heritage, Made-in-China savoir-faire that offers leather goods and accessories for men and women around the world. In the late 2000s, the brand was trying to bridge the paradox of its heritage, country-of-origin and make and its luxury positioning. Thus it called itself as « luxury for the masses ». It was infact the iedal democratization point for customers new to the luxury market, especially during the recession. Later in order to keep pace with the growing market and its success in this space, Coach expanded rapidly, both in America and in new markets in Asia. After the launch of its online stores, Coach started heavily discounting its products, both online and offline and selling their excess inventory through discount outlets. It started losing its position as an affordable luxury.
Although the volume of sales was high, revenues and profit margins were slipping. The company’s share prices were falling. Coach was at cross-roads and it has to make drastic changes in its management and strategy. It was time for Coach to seek a new direction.
The case discusses the (a) change of top-management of Coach (b) its renewd effort to position itself (c) its search for its brand DNA (d) increasing competition from the new affordable luxury players such as Michael Kors, Tory Burch, J. Crew, Kate Spade and others (e) the future.
SOM, A. (2016). Coach from Affordable Luxury to Lifestyle Brand. ESSEC Business School.