Even as U.S. consumers are trimming spending, Coach chairman and CEO Lew Frankfort ’69 is going on the offensive, according to an interview in the WSJ. Frankfort has opened nearly 30 stores in China and has plans for 50 more. He is also broadening Coach’s consumer base by introducing more high- and low-end styles.
Will this dilute the brand? Here’s what Professor Bernd Schmitt told Public Offering:
Judging Coach’s approach by the traditional standards of “Perhaps we are decreasing the overall image and prestige of the brand by making it too widely available” is not necessarily the right way of looking at it.
The concept of luxury has been changing over the years. The old “elitist” concept of luxury, which is high-priced, hand-crafted goods manufactured in Europe, is not the only concept anymore. Luxury nowadays is much more associated with lifestyle, with doing innovative things, doing something special for the consumer. And “special” can mean various things — it can mean using high-end materials or using low- and high-end materials together or bringing the brand close to where the consumer lives.
Coach’s approach makes a lot of sense to me. What Coach is saying is that while you of course need a presence in all the major cities where luxury products are bought — the world cities for example, including New York and Hong Kong and Tokyo and certain European cities — you also need to bring the luxury product to other cities where consumers live and shop, so as not to make the consumer come to you.