Business Strategies For A Luxury Bags Company

This expansion demonstrates how the luxury industry is now run by massive corporations whose focus is only on growth, visibility, brand awareness, advertising, and most importantly, PROFITS! With growth and expansion, has come a decrease in quality and rarity. The luxury garments produced are mostly not handmade but are even outsourced to large factories in places such as China and Turkey. Also, to meet quarterly turnover projections, “designers churn(ed) out increasingly trendy collections of clothes, handbags, and shoes.” (Thomas, Pg. 246) With hundreds of new stores around the globe the surplus of designer labeled merchandise is immense hence, the proliferation of outlet malls.

The luxury market is growing fast in China and India due to the rapidly increasing wealth levels and standard of living gains. Coach must keep in mind the different cultural backgrounds of each country and take that into account when designing and marketing new products and lines.

This analysis examines the economic strategy of Vera Bradley. I took a closer look at the strategic moves of this Luxury goods manufacture. The owners going from making colorful patterned duffel bags and suitcases, has now become a household brand. Their decisions to differentiate ultimately shaped the growth of their business. With a declining fiscal year, Vera Bradley decided to implement a new strategy that will be sure to revamp growth. To further explore the challenges that continue to occur throughout this case, I analyze those challenges and suggest tools and techniques that would help improve the economic strategy of Vera Bradley.

The following case analysis will assess Coach Inc. and its strategy in the accessible luxury brand goods market. The coach strategy focuses on its luxury rivals in matching key quality styles while offering it at a cheaper price. The company offers most products at a 50% off discount price less than other brands which gives them a competitive advantage pertaining to its customer base. Coach marketed its products to middle –income consumers desiring taste of luxury, but also affluent and wealthy consumers with means to spend considerably more on a handbag (Gamble, 2012. P.C-73) .The Company also has several other strategies such as to increase global distribution, improve same store sales productivity and continue its multi-channel business model which includes indirect whole sales to third party retailers but also focuses on direct consumer sales. Coach has done well in the luxury goods industry but the companies profit margin is still below the levels achieved prior to the onset of a slowing economy in 2007 ( Gamble, 2012. P.C-73.The Company had experienced a decline in sales as they are unsure if the company recent growth could remain constant and maintain their competitive advantage with other successful luxury lines Michael Kors, Salvatore Ferragamo, Prada and Dolce & Gabbana.

The author who inspired the topic of this thesis is Dana Thomas. As a fashion writer, Dana Thomas, has analyzed the changes in luxury fashion business. Thomas has been writing about fashion for the past twenty-five years in various journals such as Newsweek, The New York Times Magazine, New Yorker, Harper’s Bazaar, Vogue, Financial Times, and more. Dana Thomas’ two books, Deluxe and Gods and Kings, are the inspiration for this thesis. Deluxe: How Luxury Lost Its Lustre goes into great detail the secrets of the leading luxury industry brands, namely Prada, Gucci and Burberry, to showcase the “New Luxury” of today and how “luxury lost its luster” by featuring the manufacturing and logistical processes. Thomas exposes that many luxury brands use the same Asian factories that mass-market retailers employ, which raises questions concerning quality and craftsmanship for luxury brands.

Luxury fashion items can be acquired via several different avenues, as well as at several different price points in today’s market. Previously, the only options consumers had for the acquisition of luxury fashion goods was to purchase directly from the retail store; however, now there are an enormous amount of resources for consumers to opt for a used product at a much lower price by shopping on websites like eBay, or by purchasing from the growing amount of high-end consignment stores. Another option that luxury fashion consumers can easily utilize is to buy the item new and at a cheaper price by shopping at outlet stores or discount department stores like Nordstrom Rack and T.J. Maxx. Finally, these consumers have the option to borrow. Websites like BagBorrowOrSteal.com have created hugely profitable businesses by making the latest luxury accessory available to be rented at a cost that is a fraction of what the item would cost if purchased new from the retailer. These options have granted a much larger array of people the opportunity to experience aspects of the luxury lifestyle and the luxury image than ever before.

Gucci Group is a luxury goods retailer focusing on improving their market share while producing high quality fashionable items. Initially, Gucci’s poor business strategy and internal family conflict directly resulted in decreased sales and net income. When Investcorp took control of the company, Gucci regained their success through quality management and acquisitions. Gucci’s product line now includes a large range of products. We would like to continue Gucci’s success and believe that the next major business decision for Gucci is how to manage the new acquisitions. We recommend that Gucci cease further acquisitions of companies to its portfolio and should not challenge the status quo by making big management changes

Coach Incorporated is a company established in 1941in Manhattan. Coach is in the fashion industry and this accessories manufacturer is one of the best known brands in North America. Coach was bought out by the Sara Lee Corporation in 1985 and started being publicly traded in 2000 on the New York Stock Exchange. Coach Incorporated prides it selves off of being one of the most dependable, unique, desirable, and fashionable brands in their industry. Coach has a disadvantage with its competition, being the only one publicly traded. It does not have access to the others financial records. Coach Incorporated likes to

It is hard to imagine that after the financial crisis swept across Europe, many great transitional enterprises had to face collapse and bankrupt while the luxury goods industry become more prosperous. Recently, the French luxury goods group LVMH announced their recent business condition. The volume of the first week in October had incredibly increased by 12% the previous week. The Hermes Corporation also said that in order to meet the increasing number of market demand, it would open 15 branch stores in the latter half of the year. These aroused some fierce debates, the public held a skeptical opinion towards the questions: How can the luxury companies maintain their positions? Why didn’t they strike down by financial crisis?

The only way we would be able to make any recommendations would be if we could understand what was going on inside the company. The most notable factor was how much of Coach Inc.’s business comes from women’s handbags which can be considered as

Growth has been fueled by Coach’s niche as being ‘accessible luxury’. While Coach does not have the prices of most of its high-end competition, it is regarded throughout the industry, and most importantly by consumers, as being equal in quality to much more expensive brands.

Coach has a very strong brand image. They continue to gain new customers and because of devotion and loyalty they are able to keep repeat customers. Brand image can be considered everything to customers when searching for a handbag. Industries that manufacture handbags must be able to provide what is considered a “chic service”, while continuing a “thriving business” (Foster, 2006). Due to the brand image that Coach has they are able to introduce new and more risky handbags with the confidence that most current consumers will continue to purchase their

In terms of brand exclusivity, Hermès is best known for the elusive Birkin bag. The iconic Birkin is surrounded by mystique and mythos, and their prestige remains unrivaled. Shrouded in secrecy, the company does not report any facts and figures regarding the bag. Rumours of wait lists and member

There comes a time the fashion designer bags sales are very high and this is the moment you may get convinced to purchase one for yourself. Before you get to a point of deciding to acquire one, there are things that are essential to have knowledge of when it comes to these designer bags. The history of handbag usage is so interesting in that the bags were at one point an item for usage by both men and women. In the current generations, designer bag usage is moving the trend to being for women exclusively.

We had launched four products, comparably less than other groups which was five. Our products aimed for a niche luxury market with high technologies and expensive price. Rather than selling many products with different models, we planned to increase market shares of each specific models.