Coach has its first fragrance in the bag — a project which takes the iconic leather goods firm into the world of beauty. The eponymous scent, which will be launched in March exclusively in Coach’s 220 U.S. retail stores, is being produced for Coach by the BeautyBank division of the Estée Lauder Cos.

“We could have done a fragrance three or four years ago, but we wouldn’t have been able to do it like this,” said Reed Krakoff, president and executive creative director of Coach, during an interview in his offices last week. “Let’s face it, the world doesn’t need another anything. For us to enter this category, we needed to have the ability to do something different and to have the right energy and the right partner. We also needed to have the ability to go beyond one fragrance.”

The company, founded in 1941, overhauled its conservative image in the Nineties under the direction of Krakoff and Lew Frankfort, chairman and chief executive officer, transforming Coach into a fashion-forward, desirable brand — and expanding into higher price points, with some exotic skin bags soaring well north of $5,000. The company went public in October 2000 and has gradually expanded its reach into a host of complementary products, including eyewear, watches, knitwear, shoes and jewelry.

Krakoff added, “It’s taken us this long to build a bridge between a handbag and a fragrance. We’ve spent 10 years preparing to get there. Five years ago, we wouldn’t have had as much to say. But now, we’re a multifaceted house. We think this is a believable time to do a fragrance.”

The scent is also a milestone for BeautyBank, marking the first upscale project for the Lauder division, which was founded in 2003. To date, BeautyBank has produced four other lines — American Beauty, Flirt, Good Skin and Daisy Fuentes Beauty — all of which are sold exclusively at Kohl’s Department Stores.

While the Coach project is BeautyBank’s maiden voyage into the upscale market, Krakoff is definitely on board and, in fact, created a Coach resort collection inspired by the scent’s bottle design and its colors. The line includes swimwear, scarves and platform espadrilles, as well as a $598 canvas handbag with a graphic print of repeating hangtags called the Carly Resort Lozenge Bag.

This story first appeared in the January 19, 2007 issue of WWD. Subscribe Today.

“For us to continually get people into our stores, we have to keep doing different things to create excitement,” said Krakoff. “This [fragrance] is a new way to get customers in to see the world of Coach.”

Developed by Krakoff and Karyn Khoury, senior vice president of corporate fragrance development worldwide for the Estée Lauder Cos., in cooperation with Firmenich, the scent has top notes of tart green mandarin, guava, violet petals and water lily; a heart of genet flower, honey, orange flower, mimosa and jasmine, and a drydown of sandalwood, amber wood and vanilla. “Karyn did a great job of creating something vintage-y but not old,” said Krakoff. “This is the first fragrance, and we had to make it iconic — not too traditional, but timeless enough to have longevity, and something that smelled expensive, but not mature. In a way, the next fragrance will be easier.”

The collection consists of three stockkeeping units: a 1.7-oz. eau de parfum spray for $68, an 8-ml. purse spray, $42, and a 0.15-oz. solid perfume, $40.

The solid perfume resembles one of Coach’s leather purse hangtags, albeit one done in metal with red accents. “We asked ourselves, ‘What’s most iconic about Coach?'” said Jane Hudis, president of BeautyBank. “Of course, the purse tag was the first thing that came to mind. And a purse spray made perfect sense, too, given that Coach was founded as a handbag company. It all feels very interconnected.” The eau de parfum spray bottle is of clear glass emblazoned with Coach’s signature Cs and accented with deep red, one of the brand’s signature colors. It is topped with a cap embossed with the Coach logo.

Krakoff shot the fragrance’s visuals himself. Rather than focus solely on one image, Krakoff crafted several, including a four-page catalogue insert and a vial on a card folder with five shots, including a model in a Coach logo dress holding a fragrance factice. A national ad will feature a model sporting a Coach headband and posing with the fragrance. A scented strip will be included with the national ad, which will appear in April fashion, beauty and lifestyle magazines.

A comprehensive Internet campaign will add several million additional impressions, noted Krakoff, who added that Coach regularly communicates with more than seven million consumers through its Web site.

In addition, at the store level, Coach shopping bags will feature the national ad image. “We want to reinforce the fragrance with every Coach purchase, not just fragrance purchases,” said Krakoff. That will be carried through to Coach store windows, which will be filled with fragrance factices and mannequins clad in Coach products. Inside, the fragrance will be featured in both glass and open cases, sprinkled around the store. Coach plans to distribute about 500,000 deluxe miniatures to its top consumers, in addition to more than 1.5 million vials on cards. The scent will also be promoted in upcoming Coach catalogues.

While none of the executives would comment on projected sales, industry sources estimated that the scent would do at least $20 million at retail in its first year on counter and said that, eventually, the scent could account for as much as 5 percent of Coach’s overall sales, which are considerable. Last August, the company reported that, for the year, its net income had jumped 37.8 percent to $494.3 million, with sales gaining 23.4 percent to $2.11 billion. Coach is expected to reach $2.5 billion in sales and open as many as 30 stores in North America during the fiscal year, which will end June 30, 2007.

In the future, the fragrance could enter the brand’s 900 U.S. department store doors, which account for just 10 percent of the company’s overall sales, although firm plans have not been made in this regard.

“Coach’s unparalleled growth makes this [fragrance] project very exciting from a BeautyBank perspective,” said Hudis. “It not only fits into our alternative [i.e., non-department store] positioning, it helps to reinforce Coach as a lifestyle brand.”

And it is a beginning. “This is the start of a long-term beauty partnership and one which will include other beauty products and categories, all fitting the Coach customer and point of view,” said Hudis.

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