Coach, the maker of luxury handbags and other sundry accessories, has been having a rough year. Poor sales prompted a leadership shuffle in July, and after a particularly bad earnings report Tuesday, the stock took its biggest dive in years. Which is odd, because the luxury market has been doing really well overall, fed by a global elite with assets that seem to have fully recovered from the recessionary dumps. So what's the problem?
Part of it is certainly hard-charging competition from newer brands, like Kate Spade and Michael Kors, that appeal to a younger audience. For them, Coach is their rich auntie's label, more 5th Avenue than Mission District.
But the bigger problem may have been growing too fast in the first place. Coach, under pressure from investors to boost revenue, added line after line of merchandise and dozens of factory outlet stores over the past few years, fueling a dramatic run-up in earnings -- to the point where Coach isn't really Coach anymore.
"If you're a luxury brand with outlet stores, maybe you're not a luxury brand," mused Tim Hanson of Motley Fool Funds on a podcast Tuesday. "They took a growth-at-any-costs attitude that has done brand damage that they are paying for, but at the time that they were doing [it], it fielded stock price gains because it allowed them to put up very heady revenue numbers."
It's a problem all luxury brands face, especially public ones: How can you both sell enough on a quarterly basis to make Wall Street happy while at the same time maintaining the aura of exclusivity that got you where you were in the first place?
Mark Cohen, a professor of retail at the Columbia University Business School, ticks off the companies that have fallen into the ubiquity trap. Bill Blass "never met a licensee he didn't do a deal with," he says. Neiman Marcus "has opened stores in the last seven, eight years that they wish they could take back." Saks Fifth Avenue "took developer deals 25 years ago that gave them the immediate appearance of growth, which was false." Martha Stewart, Ralph Lauren, and Barney's haven't done themselves any favors either by going mass market either.
"It's the designer toilet seat problem," Cohen says. "The luxury business is entirely contingent on limited availability, limited supply, and limited exposure."
In recent years, big luxury retailers have found a way around the problem by pivoting to Asia, leveraging their iconic status in places like Japan and China to achieve huge sales without tarnishing their image at home. Coach hasn't had as much success there, perhaps because it doesn't have the same kind of world-wide super-appeal of a Prada or Gucci. Hermes and Tiffany's are typically seen as the gold standard in maintaining brand purity -- compensating for small sales volume with really, really high margins. Privately-held Godiva has managed to operate on two tracks, selling pricey chocolates both in convenience stores and its own, super-luxe retail spaces.
Coach is also at a disadvantage because it's not part of a large umbrella corporation that can compensate for slow growth in one of its portfolio companies with fast growth in another. A lot of the luxury marketplace falls into a few big spheres of influence: LVMH owns Hennessy, Louis Vuitton, Veuve Clicquot, Dom Perignon, Givenchy, Marc Jacobs, Fendi, Christian Dior, Belvedere, Thomas Pink, Donna Karan, Sephora, and many more. Richemont owns Montblanc, Cartier, Piaget, and Van Cleef & Arpels. Kering owns Gucci, Balenciaga, Alexander McQueen, Stella McCartney, etc. Because they're diversified, they can invest in new designers, much like a big record label can -- or could, in better days -- take chances on minor artists on the off chance they take off.
"Between the moment they invest in them and the moment they will get their return will be five to seven years," says Ketty Maisonrouge, a luxury branding consultant. "If you look at most brands, what's successful today, they all try to understand what it is to make sure you don't grow too fast."
If Coach is to recover, Wall Street is going to need to let it ease off the gas pedal, make like Burberry, and realize that a sterling brand and massive sales are a contradiction in terms.
攻势猛烈的新兴品牌自然是挑战之一，如凯特·思蓓(Kate Spade)和迈克·科尔斯(Michael Kors)，这些品牌更得年轻消费者青睐。他们认为蔻驰是富有阿姨辈的专属，打个比方说，新兴品牌就像是纽约年轻时尚的教会区(Mission District)，而蔻驰则像是第五大道(5th Avenue)，更为奢侈古板。
蒂姆·汉森是美国著名投资论坛“彩衣傻瓜”(Motley Fool Funds)的全球收益顾问，本周二，他在自己的播客中沉思自问：“一个奢侈品牌如果有了工厂店，那还能叫奢侈品吗？为了追求利润而不择手段，品牌形象会受损，他们将自食恶果，但收益表上的数字确实让人飘飘然，也带动了股价增长。”
哥伦比亚大学商学院[微博]零售学教授马克·科恩列举了几个陷入“普遍性陷阱”的公司实例。比如比尔·布拉斯(Bill Blass)，它从来不会拒绝任何一个授权方的交易请求；尼曼(Neiman Marcus)在过去的七八年间开了好几家分店，而现在他们却后悔了；萨克斯第五大道精品百货店(Saks Fifth Avenue)25年前接受了开发商的协议，并因此带来了繁荣的假象；玛莎·司徒沃特(Marsha Stewart)，拉尔夫·劳伦(Ralph Lauren)和巴尼斯纽约精品店(Barney's)此类品牌也未从扩大的市场中获得任何优势。
蔻驰的另一个劣势在于它不隶属于任何一个大公司，因此也不存在销售业绩较好与较差的投资组合公司之间的互补。许多奢侈品公司旗下都有多个颇具影响力的品牌，如法国酩悦·轩尼诗－路易·威登集团(LVMH)，该公司旗下拥有如下品牌：轩尼诗(Hennessy)、路易·威登(Louis Vuitton)、凯歌香槟(VeuveClicquot)、唐培里侬香槟(Dom Perignon)、纪梵希(Givenchy)、马克·雅各布(Marc Jacobs)、芬迪(Fendi)、克里斯汀·迪奥(Christian Dior)、雪树伏特加(Belvedere)、托马斯·品客(Thomas Pink)、唐纳·卡兰(Donna Karan)、丝芙兰(Sephora)等等；历峰集团(Richemont)旗下拥有：万宝龙(Montblanc)、卡地亚(Cartier)、伯爵表(Piaget)以及梵克雅宝(Van Cleef&Arpels)；开云集团(Kering)所属品牌有：古奇(Gucci)、巴黎世家(Balenciaga)、亚历山大·麦昆(Alexander McQueen)、斯特拉·麦卡特尼(Stella McCartney)等。就像规模较大的唱片公司现在或景况好时，会在二流艺术家身上试试运气，即使成功的希望渺茫。
(译者 YulisaLu 编辑 丹妮)