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Insider Ties: Why COACH Continues to Fail 

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Inspired by ’70s New York hip-hop culture and obviously also baseball culture, American luxury brand COACH has dropped its new Patchwork C210 leather high top sneakers for Fall 2016. With its men’s collection having made big steps over the last few seasons, the sneaker offering of COACH is moving at a fast pace as well. […]

Source: COACH Dropped Its Patchwork C210 Leather High-Top Sneakers | Highsnobiety

Everyone knows that Coach = Handbags. When Sneakerlovers are in the market for kicks they don’t even check for the brand. It’s primarily a purse older women carry that use to be the “IT” bag, but with Michael Kors growing at such a high rate, a Coach bag or item, barely gets a second thought. As it stands the brand has seen a 33% decline this year, but the more interesting look is how the brand has declined over 5 years.

coach
Note the decrease in stock price

While this is a sneaker blog, I consider it a sneaker BUSINESS blog. My goal is to analyze anyone who wants to come in and dabble in our backyard. This shoe above means that Coach now gets the sneaker business analysis and a quick discussion on why it is failing and will continue to fail.

The shoe above is wack. Releasing it solely on the high end marketplace Mr. Porter will not do anything to make the brand appear more luxury. Nike has completely disrupted the luxury sneaker model. Where Hender Scheme and other brands have found some room in the Asian markets and on some feet in the US, that market will now wait for the Premium drops from Nike which are priced better than the lux brands drops. When you take a moment and recognize how Coach has declined, it can be discussed solely as the Kors factor, but as it relates to the Sneaker Business, I have one really interesting reason and this shoe allows me to dive into it; here we go:

Brand Gating. A few years ago Amazon removed the right for third party sellers to flip Coach. Coach then established its own store on eBay which also took away the ability for the brand to be flipped. This was a form of gaining control of the market for the brand. It limited counterfeiting and gave Coach a direct to consumer market through their Coach Online Warehouse store. The problem is Nike understands the power of limited releases and resale. Nike pushes the concept and benefits from it. Why is Coach failing?

When Coach limited the ability for third party people to be invested in brand through flipping three years ago the brand probably didn’t even realize they damaged their own advertising. In 2012 I could go to the Coach website and purchase 30 purses and resell those purses. I could literally create demand because the people who wanted the bags couldn’t get them. It was very similar to the sneaker resale market. When you look at the stock chart, you see the decline since 2012 and there was a perfect storm. Kors came along, Apple began taking away buyers from the luxury market and the new luxury became tech. These shoes they have made… won’t do anything to change their slide.