NEW YORK — “The new Coach.”
It’s a phrase that’s been uttered ad nauseam since the appointment of Stuart Vevers as executive creative director in fall 2013. There have been the new clothes, the new ad campaign, the buzzy new mantra — “modern luxury” — and now, bringing them all together, a new retail concept.
During Coach’s Analyst and Investor Day in June, the company noted this “re-platforming” of the entire fleet of Coach stores will require an investment north of $570 million, spread evenly across the 2015, 2016 and 2017 fiscal years — so this is not just a simple carpet change or fresh coat of paint. The investment comes at a time when Coach continues to struggle. For the three months ended Sept. 27, net income was $119.1 million, 45.3 percent below the $217.9 million reported in the first quarter of fiscal 2014. Sales in the period were $1.04 billion, 9.7 percent below the year-ago level but higher than the $1 billion consensus estimate. Gross margin fell 290 basis points to 68.9 percent of sales from 71.8 percent in the year-ago quarter.
Still, the new look is rolling out with full steam as planned. As revealed by WWD in April, the retail concept was created by Vevers in collaboration with William Sofield’s Studio Sofield, and, as of this month, has finally landed in a trio of stores: Beverly Hills’ Rodeo Drive, New York’s Time Warner Center and Tokyo’s Shinjuku outpost. “It really came down to Stuart, William Sofield, and our internal teams coming together and having a vision for what we want the customer to experience,” said Victor Luis, chief executive officer. “[We said,] ‘What is inherent in Coach’s DNA that we wanted to bring to this concept?’”
The concept plays strongly into the history of the brand, incorporating touches of leather in traditional New York architectural details, a nod to the company’s home: steel L-beam, a glass block façade, reclaimed heartpine wood flooring. Mid-century furniture decorates the store, including steel and leather counter stools and lamb shearling-upholstered club chairs (a perfect match with Vevers’ shearling coats for fall). Walls are decorated with cabinetry-like details, featuring dozens of handbags set against a backdrop of seasonal artwork.
“The feeling we were looking for is warmth,” said Luis. “The store is a living reflection of where we are now.
“Part of the test of almost any transformation is people see it and say, ‘That’s true Coach,’” he added. “If you’re a Coach loyal customer and you walk in, it may not feel like what you’ve experienced for the last ten years, but it may feel better.”
Luis noted that while the new look will hopefully draw a new customer to the brand, ongoing references to its history — the leather touches, the house and carriage logo, the turn-lock hardware — will satiate existing ones. “There is a true, loyal Coach customer today, and we want her to come in and be surprised, but at the same time, say, ‘This is Coach and it’s great,’” he said. “If anything, it should reinforce the Coach that’s in her heart.”
Still, that “new Coach” slogan is very much at the forefront of the overall aesthetic. While overseeing Sofield and Vevers’ collaboration, Luis encouraged the pair to “differentiate us from the competitive set. Make us different from them, but still be true to Coach.”
He defined that competitive set as “the traditional U.S. luxury handbag competitors that you can think of, but also there are some European handbag competitors,” going on to say, “We see ourselves as wanting to represent our own authentic view of what it is to be America’s original authentic house of leather, but at the same time, we are, under Stuart’s direction, stepping out to be a very credible fashion resource.”
Vevers’ ready-to-wear is now only available in select stores around the world, and in the store design, sits in its own nook towards the rear, or in some cases, second floor, of the store. “There is a mix of considerations that go into where you place product,” said Luis. “As soon as you get into ready-to-wear, it’s not just, ‘Hey, we want to sell rtw, let’s put it in front.’ When women want to shop for rtw, there is a different kind of engagement. You want a little bit more of a living room feel and engagement with a sales associate, so that tends to not be in the front of the store.
“Rtw is very much a halo to the brand. The number one objective for us with rtw is to serve as the context for the Coach brand. It should provide the aspirational view of who the Coach woman is.”
A spokeswoman noted that rtw, including outerwear, accounted for four percent of sales in the last year.
Coach plans to have a total of 20 stores opened globally in the new concept prior to holiday, including locations within London’s Harrods and Paris’ Galeries Lafayette. The brand expects to re-platform 150 retail locations and open 60 new stores by the end of the 2015 fiscal year, with each location getting unique touches depending on its location (Rodeo Drive, for example, features a large skylight) and individual architectural aspects and restrictions. “We have a lot of stores, and each one is different,” said Luis. “I wish it were cookie cutter, but everything is done with a great attention to detail.”
The store will also be updated from season to season, swapping out pieces of furniture, artwork and other decorative touches, to be as in-tune as possible with Vevers’ collection of the moment. “There will be an amazing amount of newness to the store every season, in terms of just representing what the season looks and feels like,” said Luis. “This becomes a place upon which Stuart paints his picture.”