LAS VEGAS — There’s nothing wrong with department stores, customization is king and apparel will solidify a bid to fully build out Coach as a full lifestyle brand, so says Coach chief executive and president Joshua Schulman.
The executive spoke Tuesday morning at the Shoptalk retailing conference in a wide-ranging conversation focused on the Coach brand, part of Tapestry Inc., and where it’s going.
This starts with the store, whether it’s the company’s own or through the wholesale channel.
“The Coach brand a few years ago entered into a transformation strategy,” Schulman said. “As part of that transformation, it was really about one aspect. It was about reducing promotional impressions, both online and in multibrand retailers, and this transformation evolved.”
That evolution included shuttering some stores and also scaling back distribution so that when Schulman joined the team in June of last year from his former perch as president of Bergdorf Goodman and NMG International, the ceo said he “inherited a relatively clean slate” when it came specifically to the brand’s footing within department stores.
“For those of you who know my background, I love department stores and so I really see an opportunity to take the base that we have and work with our department store partners building a great brand presence because they can really serve as a not only a revenue generator for Coach, they actually serve an even more important purpose for us,” Schulman said. “When we execute right, those partnerships really serve as a lead into our brand and drive brand awareness.”
On Coach stores, Schulman confirmed their importance to the overall business.
“From a financial perspective, the customer likes to shop in stores and online and there are business models that we have that are financially viable and growing in both channels,” he said.
In fact, the company this past fall rolled out a program called Coach Create to five of its stores. The program allowed customers to personalize a handbag in store. The option is now available online, with Coach Create now in 15 doors. That will eventually scale to about 250, Schulman said.
In the case of the Amazon factor and where there are third-party brands selling Coach product, the company appears to be secure in its customers and their ability to distinguish who is authorized to sell and who isn’t, whether that be on the e-commerce giant’s site or elsewhere. When asked about how, if at all, the company is managing unauthorized sellers on Amazon and thinking about it in the context of brand equity, Schulman said customers are smart enough today to distinguish between off-price and unauthorized channels. He continued there’s enough in the way of authorized selling online, whether through the Coach site, wholesale partners or what he called “a new alliance” with Farfetch, for customers to “feel very confident when they’re shopping on our site or through our partners.”
The reining in of the various points of distribution as it relates to promotional cadence has allowed the business to nab certain successes when it comes to pricing, the executive said. The company’s leather expertise allows it to “play at the high price point,” Schulman said, which would be in the $795 to over $1,000 range. However, he also said there’s plenty of room in the middle of the pricing pyramid with $300 to $500 handbags, which is a focus for the company moving forward as it looks to fill certain gaps there.
Outside of what’s happening at retail, the company has also launched into ready-to-wear in a bid to further build out what Schulman called “the full expression” of Coach as a brand. That began when creative director Stuart Vevers joined the business and began presenting fashion shows.
“We’re now taking that DNA, that lifestyle expression [from the shows], and cascading that over different categories, really building out the merchandising strategies on ready-to-wear, on footwear as big opportunities for us,” Schulman said.
Of note is the company’s business in China, where the brand has played for roughly 10 years — a far shorter time than markets such as the U.S. or Japan, the ceo said.
“The customer [in China] perceives Coach as a full lifestyle brand because that’s how she’s grown up with it,” Schulman said. “In some ways, that’s a template for what we’re looking to do locally.”
The company’s pairing with Selena Gomez on her handbag and accessories collection Selena Grace last fall has generated buzz, although Schulman declined to quantify results of the collaboration.
“For her, her relationship with her fans is so important and being associated with Coach and our positioning is a way for her to speak to a very broad fan base,” Schulman said.
Up next for Gomez and Coach’s partnership is ready-to-wear, due out this fall. The collection includes outerwear, ready-to-wear and accessories.
As for whether the luxury brand would look to Gomez to perhaps sway Justin Bieber — despite a reported split between the two — to perhaps join in on a future collaboration, Schulman offered the entertainer was “more than invited to any of our events for Selena.”