Lew Frankfort knew nothing about Coach, or fashion more generally, when he joined the company in 1979. He soon became obsessed with the brand — then a small-batch leather goods business with a bit of a cult following — and understanding why women bought and loved its bags. He pretended to be a business reporter and made calls to shop owners that carried the brand, asking about its customers. He started poking through friends’ closets to see what bags they owned, and what brands sat alongside each other in their wardrobes.
This obsession with the consumer and the psychology of shopping — why we buy what we buy — is something that Frankfort instilled in the business that he grew from a $6 million founder-owned operation into a $5 billion conglomerate by the time his CEO tenure ended in 2014, after more than 30 years at Coach. He built the company’s data list by launching its direct-to-consumer (DTC) business, first with catalogues and then with storefronts, something that Tapestry still reports in its annual earnings.
Closet research is something that Coach still practices today. Leigh Manheim Levine, Coach’s president of North America who came up in the company under Frankfort, spoke about it as a component of Coach’s Gen Z consumer research recently at Vogue Business Fashion Futures.
Coach stumbled in the 2010s, when Frankfort’s time in charge was winding down and its bags were overproduced, often marked down and too widely distributed while competition increased. But the company that Frankfort built into what it is today is riding high on a comeback that’s based on how the exec formed the company’s strategy through the ’80s and ’90s.
It’s all laid out in his book, Bag Man: The Story Behind the Improbable Rise of Coach, out on Tuesday. I spoke to Frankfort ahead of the release about establishing a strategy that’s since become the norm for American brands, and whether or not there will ever be another Coach.
This interview has been edited for length and clarity.
Vogue: A lot of the strategy you outline in the book is now commonplace for retail — like the shop-in-shops at department stores, a DTC business, collecting and analysing customer data — but it was disruptive at the time. How did you form that plan, and how did it evolve?
I spent 10 years in government and I was responsible for children’s daycare and head start services for the city of New York, so I always had a very strong client mentality. I was serving families and children in need and I wanted to give them the very best possible service — clean facilities, trained teachers, excellent food, support for the parents. When I went to Coach, I wanted to really understand who the consumer was, because if we’re talking about selling products, we’re talking about an end user. And during my interviewing process, I pretended to be a reporter for Businessweek, calling retail stores to learn more about the brand. And among the many things I heard was that Coach had a loyal following.
So I developed a question list: where did they shop yesterday? Where are they shopping today? Where are they likely to be in two or three years? And how can Coach be there when they arrive at that point? So that was an attitude that I had both around product innovation and the marketplace.
I also studied a small European luxury brand at the time that controlled its own destiny, Louis Vuitton. They only sold at their own stores, so I started a direct-to-consumer mail order business. Then, a year later in 1981, I opened the first Coach retail store on Madison Avenue, which was a wild success. We had lines down to the corner at Christmas. It really blew us away.
But what became really clear was that if we reach consumers wherever they chose to shop, both today and tomorrow, we would be able to better control our destiny, in addition to growing our department and specialty store business. It’s a long answer to basically say, I was consumer-centric, and I leaned into that because I didn’t know anything about fashion. And I thought, why don’t I start with the consumer who pays for the product?
Vogue: It’s hard to imagine a brand today that doesn’t consider itself consumer-centric. What did brands do before DTC and data?
It was largely a designer-led focus, with input from trend analysts, looking at leading indicators for things like colours and materials, and maybe some looking at recent sales experiences. But it was largely the domain of the chief creative officer who led that part of the business. And at Coach, we created a blend of magic and logic, and I talk a lot about that in the book and it is very much alive today at the company.
Vogue: A lot of the time, fashion companies, if they’re in need of a reset, hire executives from outside of the industry to bring a new perspective. What did having an outside perspective in your case bring to the industry, and do you think it’s something fashion should get even further behind?
I’m very cautious about bringing people in from outside the industry. When we talk about building a lasting brand, we’re talking about product, consumer, brand, marketplace and the intersection of all of that. And I had the benefit of coming in to be the protégé of [Coach founder Miles Cahn] who really saw all of this. He had no interest in the fashion scene, he was about building a great product and giving it to discerning consumers who wanted quality and durability.
Many people go into the fashion industry from the outside and they don’t take the time to understand the consumer, the product, the brand, the marketplace — and they generally are not successful. Because when you look to reinvent or transform a brand, you need to understand its underlying equities. What does it stand for? You need to also understand things like who the consumer is today, who she was yesterday and what might attract the younger consumer to the brand. So it takes an immersive approach and you need to be both left-brained and right-brained.
Vogue: The detail that you looked through women’s closets to see what brands they shopped stood out to me because it’s something that Coach still does today in its consumer research. What did that help you see and understand?
When I think of a brand, I think of images and associations that people have in their minds. And so I wanted to understand if that idea of the brand lined up with what I saw in real life. We took a very analytical approach to apply research to answer specific questions. We wanted to understand the various personas of the consumers. If they didn’t buy Coach, what would they buy? Having a 360-degree understanding of the consumer: what she does on the weekends, where she travels, what her interests are, and what are the best ways to convey from a storytelling perspective.
I’m proud of [CEO] Todd Kahn and [creative director] Stuart Vevers and the entire senior team today, because Coach once again demonstrated that it can thrive after ups and downs from strategies that did not work out, or ineffective leadership. Today, Coach is at its all-time peak in terms of market cap, and the focus on Gen Z is right on.
Vogue: Coach’s comeback seems to come down to its focus on Gen Z, but also its positioning: it’s accessible luxury at a time when true luxury is getting more expensive. How did you consider the price-quality equation when it came to value?
Gen Z consumers are very different. If they want a product, they want it now, whether it’s from TikTok or Instagram, or by walking into a store. Now, they’re also more discerning in that their personal values play a very important role in their decision-making. They’re concerned with the quality and they’re looking for self-expression.
I saw Coach from the very beginning as a democratised luxury brand to occupy the space between European and mass brands. The reality is that [America doesn’t] have a history of creating luxury brands. It was only in the post-war period, starting in the ’60s into the ’70s, that women started to look for branded handbags. And 20 years after I started at Coach in the year 2000, we coined the term ‘accessible luxury’ to identify the single lane we participated in. Of course, over a period of time, that lane became a super highway.
Vogue: That category not only got so big, but it became diluted, right? What’s your perspective on that category today?
The brands that can withstand the test of time like Coach are legacy brands because they are in the hearts and minds of multiple generations. For a brand like Michael Kors to rebound, they have to go back to their essence and understand their consumers and not just try to be a — let me say, interpretive version of European luxury.
The question for all brands is can they withstand the test of time? Do they have the right association in consumers’ minds? But the accessible luxury market is here to stay, there will just be brands that come and go, except for those that endure.
Vogue: One thing that I kept wondering while reading the book was, could this be recreated today? Do you think that the same steps could be taken to create a multi-billion-dollar American fashion brand?
I can tell you one that I’ve been involved with personally: Veronica Beard. I’ve been an investor since 2013 and it’s the only fashion company I invest in today. What attracted me to Veronica Beard at the time — and when the business was less than $5 million in sales — was its jacket with a removable dickie. Women’s jackets is a very loyal category in general. Over 35 per cent of their sales comes from jackets, and the business is thriving; it’s a perfect case study. And one day it will be a billion-dollar business.
Vogue: Would you say the same lessons that you write about in the book apply to Veronica Beard?
Yes. [Founders Veronica Swanson-Beard and Veronica Miele-Beard] and president Stephanie Unwin have been great stewards of the brand and have really utilised their board — including myself — to help guide them into being an omnichannel business, into focusing on product, consumer, brand and marketplace.
You need to have a 360-degree view. Most designer brands don’t focus on everything. They might focus on the brand or the product, but not the consumer. And you need to be consumer-centric, product-centric, brand-centric.
The answer is that it can be deployed, and my hope is that young entrepreneurs — not only from fashion, but from any industry — can get some nuggets that can help them in their own journeys. And of course, I talk about vulnerability and my own failures and the fact that life is not just a bowl of cherries.
Vogue: Are there any other opportunities you’re looking for now as an investor in fashion and retail? What excites or concerns you about fashion today?
Existing companies really need to be very mindful that Gen Z thinks a lot differently than their older siblings or their parents. And they really need to lean into Gen Z values to understand how they’re thinking about the brands they like. I’m cautious about fashion brands because they really need nurturing to withstand the test of time. And it’s hard for first-time founders who don’t have the experience to look at everything around them, and figure out how to be incisive and cut to the chase, because you can only do so many things. The fashion industry is a hard industry to make it in — it has a lower level of success than most other industries when people bring ideas to market.
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