By  on February 5, 2007

Look out Bernard Arnault: Coach has another act up its sleeve.

The $2.4 billion American brand is accelerating its Legacy collection of higher-priced handbags, footwear and accessories with plans to open two stores dedicated to the collection this fall as a starting point. An industry source estimated each store can bring in anywhere from $1.4 million to $3 million in sales in its first year. It's a move that is likely to only increase Coach's competitiveness against European labels such as Louis Vuitton, Prada and Gucci and maintain the brand's stretch of double-digit growth.

The Coach success story has become a template for many global brands — and the envy of others. Legacy is one part of the strategy put together by Coach president and executive creative director Reed Krakoff and chairman and chief executive Lew Frankfort to maintain the momentum, which most recently saw the company raise its full-year guidance after reporting a 30.6 percent jump in net income for the second quarter.

"The main thing was that everything we worked on was going into building what the brand was going to become," said Krakoff, explaining Coach's growth. "We didn't do anything for one season....It's almost anything that can mess you up. You have to look at the long term and the cumulative nature of all the things you do. So whether it's designing a store window, or the store itself, a shoe, a scarf, an Internet site or a p.r. event, they all tell a story. Each one takes the customer to a different place."

Legacy is the latest new place. The stores — whose working name is Coach Legacy — will open this fall and will be located at 372-374 Bleecker Street in Manhattan and 112 South Robertson Boulevard in Los Angeles. In addition to bags, footwear and accessories, the merchandise offering will also include outerwear, apparel, fragrance and jewelry.

Small by Coach standards at approximately 1,200 square feet each, the stores will house product that is 45 percent higher in retail price than typical Coach products, ranging from $158 to $798, with an average handbag price point of $425. There are also more limited-edition styles that can raise the price, such as an alligator shoulder flap bag for $10,000. Coach's average handbag price is $300.

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