EXTENDING THE REACH
As Coach sales have rocketed over the past decade, key licensees have been the beneficiaries, too.
Since the late Nineties, Coach has added such licensees as footwear, watches, eyewear and fragrances. The licensed categories take their design cues from Coach’s handbag and accessories collections, which are well known for their craftsmanship and American styling. In all of its licensing relationships, Coach is actively engaged in the design process and controls the marketing and distribution of products under the Coach brand.
“The Coach design teams are very involved in every step of the product development process and have strong, collaborative relationships with all of our licensing partners,” said Kathy Nedorostek, president of North American wholesale and global licensing at Coach. “We’re very pleased with the performance year-to-date. We had a strong spring across all categories and all indications are the business will continue for fall.”
The licensees produce merchandise under the Coach, Poppy and, in some cases, Reed Krakoff brands.
Larry Tarica, co-president at the Jimlar footwear division of LF USA, has been involved with Coach footwear for more than 20 years, first as a supplier and then as a licensee since December 1998. Today, Coach Footwear has built a “substantial” business with flats, sneakers, wedges, sandals, clogs, platforms, boots and booties.
“What really attracted us to Coach were some key elements. We were impressed by the leadership at Coach — Lew Frankfort and Reed Krakoff —and the rest of the team, and the enduring qualities of the Coach brand and their dedication to the consumer. They are really focused on the people they serve,” said Tarica. “This has been a tremendous relationship for our company, and I can’t say enough about the Coach organization,” he added. He said Jimlar has learned so much from Coach, “and it’s been a model of how two companies can act as one.”
Jimlar, which makes products under the Coach, Poppy and Reed Krakoff labels, is invested in the same key initiatives as the Coach brand, which are international expansion and men’s wear.
Movado Group Inc. launched Coach Watches in 1998. Coach’s quartz watch collection retails from $158 to $498.
According to Efraim Grinberg, chairman and chief executive officer of Movado Group, “Business is great. Sales are up double-digits versus last year.” He said Movado has “successfully combined our watch-making expertise with the Coach brand’s signature elements in all Coach watches. This has been integral to our growth.”
He said last spring’s introduction of the Boyfriend collection was a great example of the success of the licensing arrangement. That bracelet and strap watch collection reinterpreted the oversize watch trend by giving sport watch elements softer, more feminine lines.
As for growth opportunities, Coach Watches is on the same page as the Coach brand. “We are expanding distribution aggressively in China, gaining brand strength and anticipate this to become an important market for Coach Watches. And as Coach expands its presence in Europe, we see opportunities for future growth in the watch segment as well,” said Grinberg.
Antonio Miyakawa, executive vice president of product, style and marketing at Luxottica globally, who is based in Milan, also spoke about the collaborative process.
“We have been sharing information, ideas, experiences and have been working together in a very productive way,” he said.
Luxottica will introduce Coach eyewear and sunglasses at retail in January. Marchon has held the license for eyewear since 2002; that deal concludes this year.
Miyakawa noted that the Coach optical and sunglass lines are inspired by the core values of the brand, which he described as “New York City, craftsmanship, innovation, quality and fashion.
“Beyond that, Luxottica will introduce polar lenses in the sun collections and is working to design and manufacture an Asian-fitting collection tailored to Asia-Pacific markets, also thanks to the Luxottica design centers located in Shanghai and Tokyo,” he added.
In his view, the Coach brand fits well with Luxottica’s portfolio of brands globally and the eyewear business specifically. “Coach is a fast-growing corporation that is matching Luxottica’s international expansions in many geographies outside of North America, such as Asia and Southeast Asia,” he noted. Like the Coach handbag line, Miyakawa said Luxottica is targeting growth opportunities both here and abroad.
“North America and Asia-Pacific are the two most important regions of the world where we are focusing our efforts for launching new Coach eyewear collections. In North America specifically, our retail businesses will be an important channel for sales,” he said.
The lines will be distributed to LensCrafters for optical collections, and Sunglass Hut for the sun lines, besides the wholesale distribution, which includes department stores and independent opticians.