There’s no doubt that fashion is a difficult business. Trends come and go, and consumers can be fickle. However, making bank can be easier to do when expanding your target market and trying your hand at producing one-size-fits-all items. Take Coach for example. This leatherware company started out as a family-run business in 1941 manufacturing pocket wallets and billfolds made by hand and employed a mere 6 people. 73 years later and still located on 34th street in Manhattan (although a new headquarters is slated to open at the Hudson Yards in 2015), the company has experienced such growth and success that it employs approximately 12,000 people and has been able to expand from inception to include men and women’s handbags, laptop cases, accessories, ready-to-wear lines, shoes, fragrances, and even launched a luxury brand (which has since broken off) under the name of its former Executive Creative Director, Reed Krakoff. (Krakoff was the Vice President of the CFDA and is noted for his designs which boosted the company’s sales turning it into an accessories giant worth billions).
While there are several key factors that have contributed to Coach’s long-term success, such as talent, organization, owning office real estate in New York City, outsourcing manufacturing to China, and creating high quality products (the kind that retain healthy resale value), it is certain that offering one-size-fits-all, functional merchandise has been paramount in the company’s growth. Statistically speaking, women’s handbags account for 58% of the company’s net income, followed by women’s accessories at 23%.
What does the national market look like for handbags? United States sales in this sector alone reached up to $8 billion in 2011 (up from $6 billion in 2006) according to market researcher Mintel. This makes sense considering women are willing to pay more for decent handbags these days.
Today, Coach is a leader in leather goods and the fashion industry under the direction of Victor Luis (CEO), Lew Frankfurt (Chairman of the Board), and Executive Creative Director Stuart Vevers that generates about $5.07539 billion a year (2013), proving that one-size-fits-all merchandise is a great way to go in this industry. Yet there is still high competition. Coach continues to be active in the $200-$400 space, but is fighting for market share with brands such as Michael Kors, Kate Spade and Tory Burch in the United States, and Louis Vuitton, Hermes, and Burberry in Europe.
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