When CEO Todd Kahn stepped into the chief executive role at Coach five years ago (he’d been at the company since 2008), he didn’t think his tenure would last very long. “Two weeks in, I had to close all of our stores in North America,” he says, referring to the now distant beginning of the Covid lockdowns. “But we used that moment as a catalyst to do some things that I’d always wanted to do and to really galvanise the team.”
Five years on, Coach is on a hot streak. It became the fifth hottest fashion brand on the latest edition of the Lyst Index, up 10 places from the quarter prior. It’s the first time Coach has made the top 10. Demand was up 65 per cent quarter-on-quarter, and 332 per cent year-on-year.
Today (10 February), Coach is showing its Autumn/Winter 2025 collection at New York Fashion Week. Last Thursday, the brand was the standout performer in Tapestry’s earnings, its 10 per cent year-on-year growth driving the company’s second-quarter revenues up 5 per cent.
“We’re an overnight success story, five years in the making,” Kahn says with a laugh. He credits the brand with establishing the (now much-contested) framing of ‘accessible luxury’ twenty years ago. “That really had not served us well in that [later] era,” Kahn says. “People focused on the accessibility part, not on the luxury part.” So, at the height of the pandemic, the brand sought to reframe what it was doing, with a heightened focus on the young consumer. This birthed the ‘expressive luxury’ strategy that’s pushed the brand forth to today, which Coach unveiled in September 2022.
“Our design, our merchandising, our storytelling, everything focused on this idea of a ‘timeless Gen Z’ and instilling confidence,” Kahn says. The ‘timeless Gen Z’ refers to young consumers who are willing to invest in good, classic items. “Our North Star was that we want to be a beloved brand for this young generation.”
Coach’s strategy pivot came at the right time, as its target market of young consumers were stuck at home with money to spend. During the post-revenge spending era, though, things took a turn for luxury, and the slowdown commenced. So it’s a good thing Coach is straddling the worlds of luxury and accessibility, even if it doesn’t use the verbiage of the latter.
“The distance between us and traditional European luxury is that white space. [And it] is greater than any time in our history,” says Kahn, referring to luxury’s increasingly outrageous price hikes that have gone so high as to price many consumers out of the brands altogether. “Something maybe very American in us is [that] I don’t feel good about having someone save up three months of salary to buy a handbag.”
Coach’s triangle offense
Kahn didn’t just push for a change in terminology. The CEO also worked to shift the company’s ways of working internally, breaking silos and encouraging crossover between the creative and business teams.
He points to a typical formulaic approach to fashion: “You had a strong commercial leader, the CEO, and you had a very talented creative director. And there are many examples, Lew Frankfort and Reed [Krakoff] back in the first big heyday of Coach. But we’ve expanded that.”
To illustrate, he asks if I go to basketball games. A Chicago native, he’s a fan of the Chicago Bulls. I tell him I’ve seen The Last Dance (the Netflix sports documentary about the team’s 1997 to ’98 season, another Covid hit). Coach Phil Jackson had a ‘triangle offense’, which, Kahn explains, he’s appropriated for fashion. “When I look at the triangle offense, what I do is I put the consumer at the centre. So at the bullseye, everything we do touches on that timeless Gen Z consumer.” At the three points are commercial leadership (Kahn and his team), creative leadership (creative director Stuart Vevers and team) and storytelling leadership.
The storytelling point, which refers to marketing (though Coach avoids this term as, Kahn says, storytelling goes deeper, despite having a CMO in Sandeep Seth), is what’s new in how central and interrelated it is to the other two points. “When all elements of all sides of the triangle are very focused, and their muse is that timeless Gen Z, it becomes very powerful. And that is one of the reasons we’re seeing the success.”
Banking on Z
Coach may have the backend structures in place, but how does an 80-year-old brand establish such authentic success among a young, discerning generation?
After all, Gen Z consumers at Coach have the highest retention of all of Tapestry’s cohorts, the group’s CEO Joanne Crevoiserat said on Thursday’s earnings call, lured in by the viral bag charms and returning for the slouchy, Bella Hadid-approved handbags — or vice versa.
It is, in part, down to data. Some survey-based; some ethnographic, based on field research. Because, says Kahn, you can’t just rely on numbers. “We go into people’s homes, so we don’t just hear what they say. We actually see what’s in their closets.” This is key, he says, because a survey point response doesn’t always tell the whole story, and can lead to errors in production quantities. This is further informed by the 150-plus Gen Zs Coach works with through its Coachtopia co-design initiative, whose feedback and opinions regarding the Coachtopia bags reach beyond this sub-brand.
Kahn also cautions that the data alone can never dictate a design strategy. “It’s why artificial intelligence is not going to replace our creative director any time soon,” he jokes. He points to the now bestselling Brooklyn bag, which was Lyst’s hottest product for Q4, with a 46 per cent spike in searches for the quarter. “If we just listened to the consumer [data] and didn’t have design gut and input, the Brooklyn bag would never have come about,” he says. “It doesn’t have an adjustable handle. It has very little branding. It has no functionality inside of it. Yet, it’s a compelling bag.”
Kahn goes back to the triangle: business alone can’t overrule creativity, because that would stop Coach from hitting the Gen Z bullseye.
But what about Gen Alpha? The eldest of Gen Z’s successors are now turning 14. (The same age this writer got her first Coach bag, on her first trip to New York.) Just as Coach has hit its stride with Gen Z, the company is now needing to think ahead to this next generation.
Given Gen Alpha is still a few years away from turning 18, there’s limited data Coach can obtain from the cohort, Kahn flags. But he’s aware these consumers are on the horizon. “It’s still early days, but as we stay focused on Gen Z, there’ll be a pivot moment where that focus will become Gen Alpha, and there’ll be attributes that are different,” he says. Gen Z was a digital-native generation; Gen Alpha will grow up with ChatGPT available to complete much of their homework, he offers. “So how you navigate that is going to be very different than Gen Zs or millennials or boomers,” he says, adding that he expects AI to have a major influence in driving consumers to authentic brands. “I think that would be pivotal to them,” he says. “But let’s see.”
Accessories reign supreme
Coach’s consumer may continue to evolve, but the company’s focus on accessories will remain steadfast. It was the brand’s handbag and leather goods sales that drove Coach’s increased margins and profitability this past quarter.
“Today, we are more versatile and have more icons than any other time in our history, and that was a very deliberate business strategy,” Kahn says. Take the Tabby bag, sales of which began to slow in March 2020. He explains that a typical response would have been to slowly remove the bag from full-price stores, mark it down, put it in outlets, and, a year or so later, introduce a bag with very similar attributes (“maybe called Gabby”) and the cycle would begin again.
“That fashion cycle becomes very detrimental to brands,” Kahn says. “Instead of following that negative flywheel, we created a positive flywheel.” In 2021, Coach introduced the Pillow Tabby, which quickly went viral on TikTok. That year, it topped the Google Hot 100 list. “Pillow Tabby not only re-energised the Tabby, but it created clarity that now the Tabby is an ownable icon,” Kahn says. Now, this strategy forms the base of Coach’s wider approach to accessories: always bring in innovation and newness, while maintaining the core.
“As much as we may get sick of it, there are tens of millions of people who haven’t even yet owned a Tabby, and have that opportunity,” he adds. This will inform the approach to the future of the brand’s “New York family”, which includes the Empire carryall, the Brooklyn bag, the Bowery satchels and the Times Square shoulder bags.
Looking ahead
At today’s show, as in season’s past, we’ll see more than just bags on the runway. Now that Coach has finessed its leather goods strategy, will it be looking to grow its ready-to-wear? Not yet, Kahn says. For the next three to five years, Coach’s “significant growth” will still come from leather goods. The clothes are there, first and foremost, to build out the brand world. “It would be very limiting to have an ad where the person just wears sneakers and a handbag,” he laughs.
Kahn is optimistic about Coach’s leather goods growth across the board. “We have so many opportunities both in North America [and] in new markets,” he says. “Our European market is on fire. We see tremendous growth still in Asia. So [there are] massive opportunities there.”
North America still has room to grow, Kahn says. “We want to be the bag of choice for that cohort of future clients,” he explains. In Europe, the UK is a hit and France is one of Coach’s fastest-growing markets. Kahn is also feeling good about Coach’s China footprint. “China doesn’t have to create 10 million millionaires next year. China needs to create 10 million people that can afford a $500 bag. That’s materially different from traditional European luxury.”
Beyond leather goods, Coach’s next big focus is footwear. “We’re very focused with our Gen Z strategy on casual footwear, particularly sneakers,” says Kahn. Remember the shoe charms last season? What they were really drawing eyeballs to were the brand’s new Soho sneakers, launching later this month for $145. This season, again, footwear will be one to keep an eye on on the runway.
“It is going to be a compelling extension of our brand,” Kahn says. “We see that as something foundational for us. So over the next couple of years, I see us building a billion-dollar footwear business.”
Comments, questions or feedback? Email us at feedback@voguebusiness.com.
More from this author:
Ones to watch: Colleen Allen and Zoe Gustavia Anna Whalen are putting craft at the fore
‘I’m not holding my breath anymore’: Behind the scenes of Christopher John Rogers’s NYFW return
