Victor Luis, president and chief commercial officer of Coach, has big shoes to fill come January, when he takes over as CEO of the faltering accessories megabrand with new creative director Stuart Vevers.
Speaking at WWD's apparel summit on Monday morning, Luis admitted the company has been "slow to respond" to increasing competition in the accessible luxury segment, especially in North America. (He did not name names, but we'll name Michael Kors and Tory Burch, both of which have taken significant marketshare from Coach in the past half decade.) Coach's stock has fallen 35% over the past year and a half as sales have flatlined.
"But not now," Luis said. "We're committed to putting Coach back on a growth trajectory."
And how will Coach accomplish that? First, by expanding and improving its product range. Coach plans to evolve beyond handbags and small leather goods and into a full lifestyle brand for women and men, Luis said. That initiative kicked off this summer, when the company made a big push around its "enhanced" shoe line.
"By next holiday, we elect to offer a complete expression of the new Coach," Luis said, including a "curated ready-to-wear presentation." (By 'presentation,' we assume he's referring to displaying clothes in store, but we'd be awfully excited if Coach came to Fashion Week, too.)
Global expansion is also on the calendar. Luis acknowledged that Coach never had much success in Europe -- it only has 20 stores in the whole region. Despite the state of Europe's economy, Luis believes it's a big potential market for Coach: The global market for premium bags and accessories is $34 billion he says, of which Europe represents $6.5 billion. To go after those dollars, Coach plans to open 10 more stores in Europe by next spring.
Beyond Europe, China will remain "the most important single geographic opportunity" for Coach, Luis said. The company is also looking to target the proliferating middle classes of Indonesia, India and Latin America. Currently, 30% of Coach's sales take place outside the U.S.
A big part of Coach's future success will depend, of course, on its new creative director. Luis and his team spent six months traveling the globe looking for the right person, and Vevers' appointment was a complete surprise. "We [needed] someone who is a world citizen, who truly understood the core category and brand and Coach and where we were coming from," Luis said. The company also needed someone who could deal with the challenges of a very large organization, he added.
Luis is confident the strategy will work -- in large part because the company has revived itself before, in the late '90s. The strategy then was similar: modernize the product offering, reinvigorate retail and merchandising, expand internationally and accelerate the rate that goods arrive in store. Let's see if it can work again.