The popular name brand label, Coach, seems to be in a financial crisis. The competition is getting tougher for the label, as they fight with other big names such as Kate Spade and J. Crew, who, like the Coach name, cater to those who are reasonably wealthy.
However, the financial strategies are different for these companies. Unlike their competitors, Coach has taken a different approach in saving their sales. With sales that have plummeted by nearly 7%, and over 20% lost in profits this past quarter, Coach’s bright idea to fix their problem is simple: raising prices.
This would make sense if their competitors used the same tac tics. However, labels such as Michael Kors and J. Crew have taken other approaches, which might explain their new found popularity. They, along with various other big name brands, have few accessories over the $500 limit. This, therefore reaches more consumers, and makes them a much “better deal”, compared to their Coach competitors.
Coach’s shift in pricing might actually push its buyers away. If they want to spend less money they will find a KORS or KATE bag, or even luggage for less than the price of a Coach bag. Contrastively, if the buyer is willing to buy more, they would probably be willing to venture to buy Burberry and Louis Vuitton Bags. Coach should realistically be lowering their prices to be more accessible to consumers who want the label, but not the price tag.