The Coach of today is a far cry from the humble family-run workshop on 34th Street in Manhattan that got its start making men’s small leather goods in 1941.
Fast-forward 85 years and the brand that boasted Bonnie Cashin as its first fashion designer and Stuart Vevers as its current creative director has transformed into a $7 billion business whose reach spans from its signature handbags to ready-to-wear, footwear and even coffee shops, and which has become the cash cow for its parent, Tapestry Inc.
Coach’s publicly stated goals are to hit $10 billion in sales by 2028, expand its international footprint and continue to lean into its successful strategy of targeting the Gen Z consumer.
You May Also Like
For the past 19 years, Todd Kahn has been a steady hand at Coach and its parent, joining as general counsel before being elevated to chief executive officer and brand president in 2020.
In a sit-down interview at Coach’s Hudson Yards headquarters in Manhattan, Kahn said while the brand is significantly different from where it started, there are certain hallmarks that remain unchanged.
“I had the privilege of working under Lew Frankfort, our chairman emeritus,” Kahn said, adding that it was Frankfort who brought him in as general counsel. “I always say, if you get to play for the Yankees, you don’t care what position you play,” he said with a laugh. “That’s how I felt about Coach when I joined in 2008. We really have evolved dramatically, but at our core, we’ve always been an American house of luxury.”
He said the brand is still “very focused on leather. We have an archive and a history that is incredibly rich. Coach started very close to where we are today. A group of immigrant artisans in a workshop making beautiful, handcrafted small leather goods for men. We obviously evolved in the ‘60s. We had our Bonnie Cashin period, where she took everyday items and made them great and luxurious. She took a paper shopping bag and said, ‘Let’s do that in leather.’ She was inspired by the turn lock of her convertible and that inspired her to create the turn-lock closure [on bags]. Our heritage has always been grounded and rooted in very practical everyday ideas.”
For many years, the Coach playbook was to create what it termed “accessible luxury” product. Kahn explained that back around 2000, under the design direction of Reed Krakoff, “We wanted to be approachable. We never wanted you to walk into a Coach store and put on a pair of gloves to hold the product. We wanted you to feel the leather. We wanted the age and the patina of the leather to get better over time.”
That worked well for around a decade until competitors jumped into the lucrative market and Coach began to falter. “We lost our focus. We became highly promotional without real clarity of design and intent,” Kahn said.
So Coach made the bold move of hiring Vevers, a British-born fashion designer whose résumé included Bottega Veneta, Givenchy, Louis Vuitton, Mulberry and Loewe. He came on board in 2013 after Krakoff said he was planning to leave to start his own brand, and that “started the journey of going back to our roots, back to craftsmanship, back to being a credible fashion house.”
Business stabilized, but it wasn’t gangbusters. “It was a nice brand, growing a few percentage points a year,” Kahn said.
Then along came 2020 when Kahn was given the reins. “I had had pretty much every job at Tapestry at that point,” he said. “I was given the privilege of running the Coach brand, and two weeks later, I closed all our North American stores for COVID.”
When the pandemic waned and the stores reopened, Kahn and Vevers rolled up their sleeves and got to work. Today, the lines of demarcation between them are clear. “My job as CEO of the brand is not to be the chief merchant or the creative director,” he said. “I think sometimes CEOs aspire to that so the clarity of roles is missing. But with Stuart, my job is to create an environment where creatives can thrive. And his job is to take creativity and make sure it’s commercial. That combination has helped us.”
Kahn describes his relationship with Vevers as a “blend” of two distinct areas of expertise that coexist to help the end result. “Stuart is very data-driven,” Kahn said. “At Tapestry, we have incredible access to data, and every morning we can check our phones and see what specific bags sold. Stuart looks at that every day. That’s a creative director who is engaged with our consumer. It’s not a creative director who simply says, ‘Let me put on a show. I did my thing, now let me go on to my next show.’ That’s the blending of magic and logic.”
Even so, it’s really up to Vevers to create the magic. But with a history as rich as Coach’s, he has a lot to draw from.
“I’m endlessly inspired by the conversation between the past and the present,” Vevers said. “The brands that endure are the ones that continue to evolve while staying true to who they are. A clear sense of identity gives you the freedom to keep evolving, and that’s what I love about Coach. It has a very distinct point of view, which means we can keep exploring, experimenting, and surprising people while always feeling true to ourselves.”
He added that what excites him the most is “the process of discovery. I’m fascinated by the ideas people return to again and again. They carry emotion, memory and familiarity, but they also have the potential to be seen in a completely new light. I’m drawn to the feelings those ideas evoke, but the most exciting part is discovering new ways for them to speak to the present. That’s where creativity comes alive. Inspiration rarely comes from one place. It comes from art, film, music, architecture, craft, and the way people express themselves. I love bringing those influences together until they become something that could only be Coach. Every collection should surprise people, but it should also feel completely natural, as though it couldn’t exist anywhere else. That’s when you know you’ve found something original.”
It’s that originality that connects with the Coach consumer and truly understanding her is the secret sauce that has driven Coach’s current trajectory. That consumer is defined as Gen Z, the tech-savvy demographic born between 1997 and 2012.
Kahn said brainstorming between himself, Vevers and the chief marketing officer — what he calls “the triangle offense” — uncovered the customer Coach would target and replaced the company’s former propensity to try to be everything to everyone.
“If you’re something for everyone, you’re really nothing for anyone,” Kahn said. He said he often heard from young people that their mothers loved the brand. “Well, we love that your mother loves Coach, but how do we engage you,” he asked. “We became hyper-focused on Gen Z because we know the youngest generation influences all generations. If you win with Gen Z, you win with everybody.”
So the brand pivoted with the product design, the look of the stores and the marketing, all focused on this age group.
It also led to a move away from accessible luxury and into what Coach calls “expressive luxury.”
Kahn said that Gen Z is always striving for self-expression, “and the greatest form of luxury is self-expression. Our purpose is to be real and build confidence.”
With the lion’s share of Coach products retailing for $200 to $500, observers may think the price points are too high for young people just starting out. But Kahn believes those prices are “very approachable.”
Handbags from the big European leather-goods houses are 10 or more times more expensive, so the original designs, the quality leather and the craftsmanship of Coach bags offer “tremendous value,” he believes. “I personally don’t love the idea of having to tell somebody to save four months of your salary to buy a handbag. There are a lot more people in the world that can participate in Coach than any other brand that sells a luxury product,” he contended.
Even though Coach managed to add some 9 million new customers in the last fiscal year, the brand actually has less than a 4 percent market share with the Gen Z demographic. “And it’s even less in some markets,” Kahn said. “In China, we’re under 1 percent.”
So there’s plenty of room for growth. And it doesn’t involve taking market share from competitors. “Coach at its best has always brought consumers into the category. That’s what I want to do,” Kahn said.
And the number of potential customers is “staggering,” he added. Over the next 10 years, the number of women turning 18 in Coach’s major markets is 25 million annually. “That’s powerful, and our goal is to make her first experience amazing. If she has a great first experience, the likelihood of her coming back for more experiences or more classifications are higher. That’s why we’re showing tremendous growth in our footwear category. The frequency of purchase of footwear is higher than handbags, so we love that.”
Sneakers in particular are popular with this demographic.
But the most popular category continues to be women’s bags, particularly the Tabby family that Coach believes can become a $1 billion business by itself. “Tabby is really our only icon,” he said.
Other popular models include the New York family, which includes the Brooklyn, Empire and Chelsea bags, which Kahn described as having softer leather with a cleaner look.
At the outlets, the Teri bag, a shoulder bag in canvas that retails for around $219, is an opening price-point favorite of Gen Z. “There are probably more TikToks on Teri unboxings than anything else,” he said.
The sales volumes of the Tabby and the Teri prompted Kahn to refer to them as TNT for their “explosive growth.”
But where does apparel fit into the picture?
“Women’s leather goods is still our core category and always will be,” Kahn said. “But ready-to-wear has a vital role to play because it sets the fashion tone.”
Kahn said that when he set the $10 billion sales goal back around 2021, Coach was only around a $4 1/2 billion business “so it was a bit of a moonshot. But I wanted to rally our teams; I wanted an aspiration. How we’re going to get there is to be exceptionally good at the categories we’re in today. To get beyond $10 billion — which will become the next threshold at some point — I see us growing our full lifestyle across both genders in a meaningful way.”
Like the leather goods, the apparel is also designed to appeal to the Gen Z consumer, as evidenced by Vevers’ shows, which are often centered around more casual looks such as denim and the popular Soho sneaker. “The runway is a creative lab,” he said, that reaches thousands of people in person and online.
The stores have also been updated to appeal to Gen Z. Coach currently operates 955 stores — 330 in North America and 625 internationally — and the plan is to add another 50 units in fiscal year 2027, 75 percent of which will be overseas. “We’re primarily a direct-to-consumer business so our interaction with the customer is so material,” he said.
The redesign of the stores was actually inspired by the company’s Tabby bag. “We took some of the Tabby codes and are using them in our new store expression,” he said.
Although the bulk of Coach’s business is women’s accessories and apparel, men are also a key focus for the brand, and will become more so in the future. “We have a very large men’s business,” Kahn said. “Men have always been part of the Coach heritage.”
Today, men’s product accounts for 20 percent of sales, but there’s plenty of runway ahead. “If I want to be a $10 billion brand, that means I want to be a $2 billion men’s brand,” Kahn said.
Coach has historically had large men’s businesses in Japan and China, and closer to home, the brand has evolved into more younger-skewed leather goods with smaller, fashion-forward pieces such as crossbody and messenger bags.
The Soho sneaker is also popular with guys, as is leather outerwear. “We’re going to grow men’s,” he said. “It’s going to be an even more important category for us. We have a lot of men coming into our stores. I want to sell them something.”
Other areas where Kahn sees growth include international markets. Because Coach has such a strong presence in the U.S. already, the company has said that 70 percent of its growth will come from overseas.
“China is by far the single largest international market. We have so much headroom in China, and I think our brand, our aesthetic and our price positioning is absolutely right for China right now,” he said
Coach has been in the country for over 20 years and has run it directly since 2008, but it still has relatively few stores for the size of the market. “I’ve gone to cities like Wuhan, where we’ll have six stores and we could have 12, and there are whole regions with millions of students where we don’t have any.”
Another recent change is that outlet stores are no longer serving the same purpose. Under the company’s “One Coach” strategy, popular collection products have been added to these stores, where they retail for full price.
“When somebody goes to Sawgrass outlets near Fort Lauderdale, they might want a Tabby bag. Well, it was an outlet and we didn’t sell Tabby,” he said.
A similar convergence between full and off-price has also been replicated online, Kahn said. “We used to have two different websites in North America: CoachOutlet.com and Coach.com,” he said. “Today we only have Coach.com. When you search a handbag on our site, you will be offered outlet bags and collection bags.”
Marketing will also play a role in Coach’s future growth. But it’s not traditional channels. In the past, the company had spent only around 3 percent of sales on marketing, but today that number has jumped to 12 percent. But rather than just showing pretty pictures, it focuses on highlighting what matters to its Gen Z customers.
For example, its most recent campaign is “Explore Your Story,” which is centered around storytelling. Cocreated by its Gen Z customers, the campaign speaks to their love of reading books. There’s also &Coach, which takes it a step further and homes in on embracing self-expression and confidence.
Kahn said that when chief marketing officer Joon Silverstein came to him last fall and told him Gen Z loved books, his response was: “‘What are you talking about? Gen Z is a digitally native generation that is always on.’ She said, ‘You don’t understand,’ which is often the way people have a conversation with me. And then she said because they’re so digitally engaged, real books are an antidote to being inundated with digital content, and it gives them a sense of community.”
So Coach created book charms of full-size books such as “Sense and Sensibility” and “I Know Why the Caged Bird Sings” and had high-profile ambassadors such as actresses Elle Fanning and Storm Reid along with WNBA star Paige Bueckers appear in the campaign.
The company has also expanded beyond product by opening different physical formats around the world, including coffee shops and Coach Play stores. The coffee shops are inspired by New York City diners, serve drinks and snacks and sell exclusive merchandise. The first opened at the Grand Indonesia Mall in Jakarta, and there are currently six in the U.S. with another two that will open before the end of the year. “Coffee shops are particularly engaging, and we generally do them in high volume locations, often outlet stores,” Kahn said.
Coach Play is an experiential shop that blends customization with fashion and encourages customers to engage more with the merchandise.
All in all, Kahn has some ambitious plans for Coach as he looks toward the next 85 years.
“I have confidence because the team, the diligence, the creativity is there. It’s not hubris. I’ve seen what hubris does to companies,” he said. “We’ve created an environment where we are not fear based, where we try things and when they work, great, we double down. If they don’t work, we move on. My style of leadership here has not been about being definitive and directive on all things. If you’re always definitive and directive, you always have to be right. And no one is always right. That’s for sure.”
And Kahn has the complete support of Tapestry CEO Joanne Crevoiserat. “Coach has never been more iconic, and we’ve only scratched the surface of this brand’s potential. Every year, millions of young people are coming of age, discovering who they are and looking to express themselves. Tapestry has built a playbook to deeply understand and authentically connect with these consumers, and in the hands of talent like Todd Kahn, Stuart Vevers and our incredible global teams, that playbook is why I have no doubt this 85-year-old brand will continue to inspire today’s consumer and generations to come.”