Wrong Prescription for Coach’s Ills

Coach continues its downward slide. Sales in 3rd quarter 2015, dropped 15%. Some blame currency issues and the over-proliferation of outlet stores. Note to leadership, it’s the merchandise. Stuart Vevers strategy is stodgy, European and not much fun. The sleepy handbags are more matron than Millennial. Note to pundits, Millennials love outlet shopping. I still contend that their turnaround strategy is seriously flawed and too dependent on overly competitive apparel. I wrote this post in 2014 and not much has changed except Michael Kors and Kate Spade are hitting some headwinds, as well.

Coach’s 2014 first quarter profit fell 20%, while aspirational fashion rivals such as Michael Kors and Kate Spade continue to ratchet impressive gains. Coach experienced a steep drop in North American accessories sales. Coach’s strategy for slumping sales is a planned full lifestyle assortment, to include apparel and a greater emphasis on higher priced bags over $400, the volume sweet spot.  They recently hired a new creative director Stuart Vevers, to take over for Reed Krakoff (who is resigning); his first product introductions will be in Fall 2014.

Coach spring 2014 styles

Coach spring 2014 styles

As a Coach watcher and stock holder, this strategy goes down like bad medicine. Instead of aiming to win in the sweet spot, they are abdicating to the competition. Michael Kors’ apparel is a footnote to his successful handbags, watches and shoes. Kate Spade offers some of the most whimsical, colorful, bags, shoes and accessories and apparel is secondary. Tory Burch is a shoe and bag story with apparel paling in comparison.

Accessories are the democratic categories in which women of all ages and sizes can play, women’s apparel is stuck in a highly competitive funk.

Coach was riding high, in the early 2000’s. Their then colorful, fresh, “C” logoed bags were the “it” bags for the aspirational designer masses. Over time, they became ubiquitous, as every hairdresser and soccer mom carried them. As they down-trended, they didn’t follow with renewed  innovation, instead made the critical mistake of looking back and doing a rehash of the sturdy, vintage Legacy styles. These unrefined bags, although colorful, looked like a clunky 1980’s LeBaron instead of a chic 2013 Audi. The competition was forging ahead with exciting materials, color and patterns, like Michael Kors’ glam styles, Kate Spade’s playful totes and tech cases, the silicone Furla Candy bag and styles by Rebecca Minkoff, Marc Jacobs, Ted Baker and Longchamp.

The current assortment is sleepy at best. It feels like a lightly-veiled nod to Salvatore Ferragamo. They played it safe and sexless. There is no emotional must-have draw. Even with 25% off coupons, one is hard pressed to spend the deal. The prospect of a larger selection in the $600 plus range is a miscalculation of opportunity. They need to focus on modern, forward  materials, shapes and details in the $400 range sweet spot; then offer additional showstoppers in the $600 plus range.

Coach went too safe.

Coach went too safe.

A  key asset for Coach is their well-priced, quality shoe line. They offer slightly more wearable shoe heights than Kors and at prices lower than Kate Spade. I hope they don’t think they need to raise prices and heel heights to get a new customer. Maintain the $198 average price point and expand the selection to include more options of fashion-forward sandals, pumps, wedges, loafers and boots.

This great American brand has had a small stumble. When you take fashion risks as good brands do, you will trip-up sometimes. This brand has a cold, but certainly isn’t terminal. They just need the right prescription for renewed health.

Dix&Pond is the blog of Dix & Pond Consulting Creative and strategic consulting for retail, wholesale apparel, footwear, consumer products and branding agencies. Follow me to get the latest posts

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Coach – Stellar to Stumble

On the short-list of first-class American fashion brands, Coach certainly makes the top ten. The nature of market leaders is their willingness to take chances. No one becomes an Olympic skater holding the rail.

Coach fourth quarter 2012 North American sales were down 2% over last year, which sent the stock tumbling this week, in spite of increased international sales. North America accounts for two-thirds of the company’s business.

I have great respect for the aspirational luxury bag and accessory seller. They have turned a 72-year-old leathery dowager into a fashion powerhouse with their risk taking market leadership. There are far too many lackluster brands, that stand for nothing. I give them credit for ground breaking newness and willingness to take bold moves.

As an avid Coach watcher, the answer for the poor results is obvious. For many successful years, they addicted their logo-adoring masses to fresh shapes and colors of their iconic fabric “C” patterns. These signature looks fulfilled the fantasies of mainstream wanna-be social climbers. Unfortunately, the patterned bags have become, all too common on the arms of every stroller pusher and tweeny bopper in the mall.

Fall 2012 Coach Legacy bags

Fall 2012 Coach Legacy bags

They saw this coming. In second half of 2012, they took a radical step and introduced the Legacy collection. I never warmed up to this collection of vintage leather Coach styles in bold colors. They bet the ranch on Legacy and it dominated the second half assortment. I awaited its pending arrival and wanted to love it. Somehow, it didn’t feel modern, and the traditional leathers seemed a bit dowdy in a digital world. Perhaps it is the sea of wristlets and cross-body bags, aimed at an over-indulged teen? It doesn’t have the freshness of their more innovative styling. The only thing it had going for it was color. I give them an A+ for trying. This is the fashion business and leaders sometimes stumble.

CEO, Lew Frankfort is blaming the lack of demand on “competition.” Some say Michael Kors is taking a bigger share. I think the iconic Kors bags with the MK charm, are getting a tad stale, too. Kors does a larger shoe collection and dominates in uber-hot fashion watches. Kors stores have a consistent mix of accessories, apparel and shoes and isn’t reaching for an entry-level teen. I think Marc Jacobs, Kate Spade, Tory Burch and others are sucking the aspirational luxury winds in bags.

Coach won’t stay on the rails for long. This champion will bounce back. In bags, I think they need to explore more luxe leathers, modern materials like colorful patent leather and even silicone, as well as bold new shapes. They are talking about relaunching their shoe collection. I think their shoes offer tremendous value in terms of fashion quality to price. Expanding fashion jewelry and watches is an opportunity as well. Stay tuned. See Coach.com

Fall 2012 Coach loafers - A modern twist on a classic

Fall 2012 Coach loafers – A modern twist on a classic

Dix&Pond is the blog of www.dixandpond.com Creative and strategic consulting for retail and wholesale apparel, shoe and consumer product companies. Follow me to get the latest posts

6 Reasons Fashion Brands Fail to Thrive

Many apparel, shoe or accessory brands fail to grow, thrive or evolve over time. Fashion is discretionary. Clothing, footwear,  jewelry, handbags and accessories are emotionally driven purchases. Brands are much more than products, they are a total experience.

Consumers must identify with the implied promise of the brand to become loyal customers. Here is a slide show of the 6 main reasons that fashion brands fail to thrive and some of the stellar brands that are knocking it out of the park:

5 Reasons Why Fashion Brands Fail to Thrive

Creating a successful new apparel, shoe or accessory brand is difficult. Keeping it consistent and evolving with the audience over the long haul is challenging. Repairing a flagging brand is nearly impossible.

Fashion brands are not just individual products. The products, marketing, multi-channel experience, customer service and corporate identity are all an expression of a greater deliverable to the consumer. A successful brand is a total experience that the consumer can identify with. Consumers express who they are or want to be, by the brands they choose.

Too Narrow a Niche – Every brand concept has an audience of a least one. The success of a brand will depend on the size of the audience for whom it resonates and can’t grow beyond owning 100% of it. Understanding the size of the niche is critical to setting growth expectations. The most successful fashion brands are a lifestyle and tend to reach a wide spectrum of ages. Classic American brands like Ralph Lauren, Coach or J. Crew have the potential to reach a wider audience, than smaller niche brands like Betsy Johnson, BCBG or Coldwater Creek.

Lack of Identity – All great brands need to have a distinct personality. What they are and what they imply is essential to defining the brand identity. Half- baked concepts and inconsistent messages are dead on arrival. Brands have to have a soul and authenticity.

Too Many Cooks in the Soup – Great brands are focused and have consistent storytelling. Compelling stories are not crafted by committees, but generally woven by creative and opinionated visionaries. Mickey Drexler at J. Crew and Mike Jefferies at Abercrombie are perfect examples of this. They both have a reputation for razor-sharp clarity of vision and have their heads in the details for their entire brand experience. They offer consistent products and take fashion risks within the context of their brand story.  Behind every great brand you will find a strong brand champion.

On the other hand, many wholesale or retail private brands are lackluster, because silos of management are allowed to tinker with the offer, and the brand becomes a spiceless soup.

Clinging to History – Fashion brands with the longest history often find it difficult to find a current relevance. Customers evolve. Staff can get hamstrung by the past and they rest their laurels on old successes. They keep regurgitating them. They often don’t understand what the brand promised to the consumer. They only see the brand in terms of the individual products that were successful in their best times. They don’t have the vision to tell the brand story through relevant products in a current context.

Talbots is perfect example of this. In their heyday, Talbots was synonymous with a monied, New England coastal, lifestyle. Their customers played exclusive sports and volunteered at non-profits. They had the luxury of choosing not to work. If they worked, they were professionals or women rapidly climbing the corporate ladder. If it wasn’t your lifestyle, shopping at Talbot’s was entre to the exclusive club. There was a definitive social status for shopping at the red-doored, suburban stores. They sold a lifestyle, embodied in their total experience.

Talbot’s today is sailing in a dead calm. It lost its personality and cache of the New England good life a long time ago. The series of CEOs since Mrs. Talbot, didn’t understand what they were trading away. They didn’t understand how the customer evolved and weren’t protective of the exclusivity, the implied status of the brand. They opened cookie cutter stores in bland locations with a gyrating assortment. The theater grew bigger than the audience for the brand. It wasn’t special to shop at Talbot’s anymore. It became synonymous with an aging customer and their boomer customers don’t want to identify themselves as old.

Coach and Burberry are great examples of classic brands that have evolved a long history, into even bigger success.

Traditional Marketing vs. Engagement – We live in a diverse, fast-paced culture with the added complexity of a splintered media. Traditional marketing on TV or print media don’t have the reach they once did. Creating brand awareness has become increasingly complex because consumers have so many shopping and entertainment options. Marketing has become interactive, no longer a one way street. They are bombarded with messaging and will filter to the most interesting and engaging experiences with limited personal time.

Brands have to be keenly aware as to who the audience is and engage customers on their terms. Social media gives the customer a big platform to create or destroy brands.

Dix&Pond is the blog of www.dixandpond.com                                                                                                                                                                    Creative and strategic consulting for retail and wholesale apparel, shoe and consumer product companies.

Take the brand quiz… Can you identify these successful brands?

Can you identify all of these distinct brands? See answers below.

Answers: A= Coach, B=Tom’s, C=Lululemon, D=Michael Kors, E=J. Crew, F=Vera Bradley

Well Shod- Fall 2012 Shoe Trends

Shoes and bags have been on a retail tear lately. The excitement in footwear and handbag design is palpable. As designers have taken style risks in colors, shapes and materials, consumers have rewarded them with ever-increasing sales. The Saks 5th Avenue flagship which has one of the most extensive and exciting designer shoe floors on the planet is expanding once again. Macy’s Herald Square is creating the largest shoe floor in the world at 39,000 square feet. There is a highly innovative period happening in athletic, casual, dress shoes and boots. In the shoe biz, the ante is up and it’s no time to bluff.

Fall 2012 Shoe Trends

Fall 2012 Shoe Trends

Shoes and handbags like the beauty area, are inclusionary of all sizes and ages, so all customers can play in the game. Plus-sized customers have under-sized apparel options so they turn to the democratic shoe floor for a fashion update. With shoes (with a few extreme exceptions), the forgotten male or female boomer can send a major fashion smoke signal, without looking like a desperate fool.

Women covet shoes and will reach beyond their means for status brands like Prada, Miu Miu, Valentino, Tory Burch, Brian Atwood and Christian Louboutin. They are also stuffing their closets with Uggs, Sperry, Kate Spade, Coach, Michael Kors, Nike, Converse, Hunter, BCBG, Stuart Weitzman, Cole Haan, Ivanka Trump, Tom’s and Isaac Mizrahi to name a few.

Here’s a run down on the best Fall 2012 trends:

Color and Patterns – Colors and patterns such as animal prints, are major drivers of newness in all categories of shoes

Lighter Than Air – Ultralight and colorful running and athletic shoes from Nike, Asics, New Balance Minimus, etc.

Retro Vulcanized – Retro sneakers are hot in new materials and colors from Superga, Uggs, Converse and other designers.

Glam Casuals – Casual has gone glamorous in boat shoes, slippers, boots, loafers and sneakers with glam styling such as metallic, sequins and glitter

Tough Love – Biker details such as buckles, straps and multi-studs on boots, sandals and smoking slippers

Oxford Grad – Classic and inventive oxfords continue in contrast colors and materials (Valentino even has lace tipped patent leather oxfords!)

Tipping Point – Ultra high ice pick heels and pointy toed pumps

Feminine Flats – The world is flat.. especially hot are smoking slippers in a wide variety of materials

Dix&Pond is the blog of Dix&Pond…creative and strategic consulting for retail and wholesale apparel, shoe and consumer products.

She doesn’t have to have it….

For the past several years women’s apparel sales have been lackluster. Handbags and shoes have taken the spotlight and continued to outperform while apparel languishes. The excitement in shoe and bag design is palpable. Designers have continued to up-the-ante in footwear and bags, in bold colors, fresh materials and pushed the limits on new shapes. Confidence has spurred a creative explosion in these categories. This has added up to multiple seasons of big personality accessories winning hearts and wallets, in a down cycle of consumer sentiment.

Women’s apparel is another story. Here are several reasons for the depressed fashion phenomenon.

There is a lack of creative risk taking in apparel by wholesalers and retail merchants; call it retail sameness, fear of failure, wholesale and retail firms have a bad case of stage fright. They’re driving with eyes in the rear view mirror and trading down on quality. Many look to the past for the future and figure the safe road is the way to hunker down. Recessionary assortments of apparel are a counter intuitive bland diet for a customer with no appetite. Consumers have to be stopped in their tracks and wined and dined with fresh novelty and must-have styling.

There is a dearth of contemporary brands for the wealthiest segment of the market. Boomers+ have the money, but there is a lack of fashion forward casual brands suitable for the aging customer. This segment must choose between dowdy mature offerings or “do I look foolish” in this uber-short contemporary dress? Consequently, they turn to forward accessories to look current without looking like a sorry soul. This is an opportunity to reach a big underserved market.

Size matters. There is a lack of larger sizes for an “expanding” population of all ages. Women bigger than a size 12 or 14 can’t find much in most specialty or in mainstream areas of department stores. A huge part of the population is literally ignored. Larger women have to turn to the democratic accessory and beauty departments for a fashion update.

It is frustrating to shop for apparel in traditional store formats. Most women today are strapped for time, have short attention spans and an overwhelming sea of options. It is difficult to shop for an item, when most department and specialty stores are organized by collection.  If she needs a white top, she is forced to shop a whole store or department to find the item. A harried consumer will bypass department stores for the ease of shopping a simpler format with item depth, like J. Crew. Handbags, shoes, cosmetics, jeans and lingerie tend to outperform other areas. These departments are classifications, not collections and easier to shop. Part of the rapid growth of online shopping is that it simplifies the process. It quickly nets the offer to classifications.

The best accessories come from wholesale branded companies like Prada, Kate Spade, Tory Burch, Longchamp, Coach, Michael Kors, to name a few. Bags and shoes are two areas where there is little private label. Consumers are validated by brand authenticity and the inherent status of branded accessories. For the most part, private label apparel is subject to large committees of leadership, who all put their stamp on the offer. Subsequently, they can water down the soup.

Accessories are the easiest way to update last year’s wardrobe. Apparel like accessories, is an emotional buy. It is unfortunate that most traffic doesn’t covert to a sale, only a disappointed customer. Compelling merchandise is the key way to improve conversions. If wholesaler and retailers continue to offer vanilla assortments, the consumer will continue to spend her disposable income on the latest accessories and technology.

 The following pictures are “best-foot-forward” displays from some major retailers. Their brand identities are indistinguishable. Do you think “she’s gotta have” this merchandise?

Dix&Pond is the blog of Dix&Pond consulting…strategic and creative product development and brand consulting.

Timelessly Chic – Newport News

2012 is undoubtedly one of the most colorful years in women’s fashion. Neon color and uber brights will stop you in your “espadrille trodden” tracks. These enchanting hues can transport a working girl from cubicle to samba, in a flash of Tangerine Tango!

Amongst the colorful chaos stands a timeless, American, nautical inspired trend. I call it Newport News, elegant, simple, a tad preppy and screaming good taste. It perennially rears its lovely head in transitional seasons, like early spring and summer. Think dry cottons…canvas and twill, breezy voiles, openwork sweaters, rope soles and handles and leather luggage details. Simple two-toned stripes and nautical motifs are the primary graphics.

Newport News - American Nautical Trend for 2012

This is more of an important accessory story, than full-blown “down-on-the-docks” dressing. It can just be one refined item like J Crew’s sequined anchor top or as simple as a striped boat neck from Rugby. Make it modern by pairing refined pieces with more casual ones. Like sequins with denim or a sateen striped clutch with a rustic knit sweater. Bottoms include denim shorts, slim and flared jeans, as well as pleated long or short skirts.

In shoes, think fabric…espadrilles, ropey wedges, ballet flats, as well as boat shoes. For bags there are roomy fabric totes, wicker clutches, back packs and sturdy leather bags. Longchamp’s white Le Pliage totes are also perfect “nautical chic”.

Officer’s navy and sail white are the primary tones, but can be accessorized with brazen accents of banana, poppy, emerald or orange.

The best “Newport News “accessories and clothing can be found from the beloved, usual prepster suspects…Rugby, J Crew, Madewell, Kate Spade, Milly, Tory Burch, Sperry, Coach, Longchamp, and Ralph Lauren.

Newport News is a natural trend for home decor. The contrast of polished with casual textures, is perfect for an urban loft or coastal cottage.

Dix&pond is the blog of Dix& Pond Consulting.

 

Talbot’s – Luffing Sailor

I originally published this post in February of 2012. Yesterday Sycamore Partners agreed to buy Talbot’s in a deal for $369 million, including net debt. This is good news for Talbot’s but the massive work to restore this shipwrecked brand is yet to come.

February 2012

I had the good fortune of meeting Nancy Talbot,  or  I should say “Mrs. Talbot” as everyone respectfully addressed her. She was a woman with a point-of-view, opinionated and had a clear vision for the iconic retail brand she had founded. Talbots was synonymous with a monied, New England coastal, lifestyle. Her customers played exclusive sports, golf, sailing, riding and tennis. They volunteered at non-profits. They had the luxury of choosing not to work. If  they worked, they were lawyers, investment bankers or women rapidly climbing the corporate ladder. If this wasn’t your real lifestyle, shopping at Talbot’s was entre to the exclusive club.

The stores felt residential. Her brand was defined by a touch of whimsy and happy color. She assorted her stores from hundreds of creative vendors, but it had the consistency of  one discriminating eye. She was a visionary brand builder in the league of a Mickey Drexler (J. Crew) or Reed Krakoff (Coach), for her time. There was a definitive social status for shopping at the red-doored, suburban stores.

Can Talbot's brand ever be restored?

Can Talbot’s brand ever be restored?

Talbot’s as it stands today is a sailor luffing in a sea of retail sameness. It lost its hard-won personality. If you woke up in a store, there would be no identifying clues to where you were.  Long ago, it lost it’s  cache of the New England good life. The series of owners and CEOs since Mrs. Talbot, didn’t understand what they were trading away. They didn’t understand how the customer evolved and weren’t protective of the exclusivity, the social aspect of the brand. They now design all of their own products and even with this centralized control, they’ve lost that one-eyed point of view. They played it safe and didn’t take any chances. In a quest for growth and uniformity, they opened hundreds of bland mall-stores. In recent years they stole other retail identities and zig-zagged product. Sales proliferated and it became “common” to shop at Talbot’s. Authenticity can’t be faked.

The Talbot’s customer was also a Coach, Burberry, J. Crew and Ralph Lauren customer. These are some of the hottest apparel and accessory brands in the world today. They stand for something, they take creative risks.  The common denominator is each one of these,  is it run by a visionary brand builder, not a committee allowed to sterilize risk taking based on historical sales. At these companies, fashion leadership dominates over history, while brand heritage is respected and evolved. Other brands are thriving in the classic fashion arena, Kate Spade, Tory Burch, Milly, Hunter Boots, Sperry, Jack Rogers to name a few. The former Talbot’s customer loves them all.

Talbots is on the block again and will inevitably be picked by another optimistic bidder. They will shutter stores and cut expenses and search for the holy grail of retail CEO’s. We are still grossly overstored and only true leaders will thrive. The results will be the same once again, if they can’t create social status and demand for shopping at this once venerable brand. They have to find leadership that truly understands that fashion is show business and have to restore credibility to the total brand experience.

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