If Coach Inc. had its way, all men would carry purses.
“Manbags, murses, man purses — they are characterized in many different ways, but it is a very substantial opportunity for us,” Victor Luis, president of Coach International, told the audience, whose skepticism turned to intrigue — and laughter — after they viewed a series of clips from popular films and television sitcoms that poked fun at guys who carry bags.
With the image of an exasperated Jerry Seinfeld and his “European carryall” still fresh in the minds of the audience, Luis launched into a presentation of how Coach, which reported $3.61 billion in sales in 2010, is aiming to expand its men’s business from 3 percent of sales to 10 percent in five years.
Key to this expansion is Asia, and more specifically, China, where men account for 50 percent of the handbag and accessories market.
Currently, the global market for accessories and handbags equals $26 billion, and just 15 percent, or $4 billion, of that is devoted to men, Luis said. Of the $26 billion market, North America accounts for 30 percent, while Japan and Europe both equal 15 percent. In the next four years, that $26 billion market is projected to expand to $36 billion, Luis said, and China, which represents just 11 percent today, is expected to mushroom to 20 percent by 2015. Growth in North America and Japan, however, is supposed to moderate during that period.
With that said, the idea that Coach, a brand known for its women’s handbags and accessories, can conquer the men’s accessories market may elicit a few eye rolls. But the New York-based firm actually started as a men’s brand 70 years ago, and it wasn’t until 1962, 20 years after its inception, that the company produced its first women’s handbags and accessories.
“In many ways, this is getting back to our roots and capturing our fair share,” said Luis, who added that women’s bags started to really take off in the Seventies and Eighties. Coach cemented its place as a fashion destination in the late Nineties under the direction of then executive director and president of design Reed Krakoff. (Krakoff is now president and executive creative director of the firm.)
Now the brand is coming full circle, Luis said, “relaunching men’s as a true global opportunity,” with several new categories like small leather goods, handbags, outerwear, accessories, giftables and footwear.
Although Coach is making a global push to expand its men’s business, its focus is on Asia, which is anticipated to account for nearly three-quarters of the global market by 2015. And part of that push is understanding the Asian male consumer, Luis explained as he unfurled a shiny black men’s hobo bag, which he referred to as a “mobo.” Seconds later, he held up a current bestseller in Japan, the sling bag, an oblong fanny pack meant to be worn across the body like a messenger bag.
Unlike the North American consumer, Asian men own more than one bag and tend to be more fashion-conscious than their North American counterparts.
Still, even though Asian men are more into their accessories, Coach isn’t ceding any ground in North America. At the end of 2011, it plans to roll out three full-price men’s stores in the U.S. and 10 factory stores, as well as men’s concept shops that will be in 37 existing Coach locations in North America.
In China, the company is planning on expanding the dual-gender format to not only the majority of its 53 stores, but to any stores it opens in the future.
“We have pretty audacious objectives in trying to reach 10 percent penetration, which I guess some would argue is still conservative, given the fact that it’s 15 percent of the market. We at least should try to aim for that,” Luis said.