[/floatr]CNN: Coach Gets Traction In Japan's Bag Wars
Some U.S. luxury retailers are bracing for a chilly Christmas as a credit crunch cuts consumer spending. But the mood is sunnier on the far side of the Pacific, where Coach is enjoying springtime in Japan as the country's fastest-growing imported handbag brand...Coach's Japan sales have zoomed over 400% since 2001 to $483.2million in fiscal '07. Its market share has more than tripled to 11% as it chases Louis Vuitton...Coach also made plenty of missteps in appealing to younger Japanese consumers in the 1990s. First, the American handbag company picked the staid Mitsukoshi department store as its exclusive distributing partner..."Why on earth are you working with Mitsukoshi?" Mike Fiorella, then a marketing adviser for Coach, had asked Ian Bickley, then head of Coach's Japan operations. Fiorella, who had lived in Japan for more than 10 years at that time, knew that women in their 20s and 30s didn't hang out at Mitsukoshi...Coach needed to convince local shoppers that items designed and crafted by a New York-based firm differed from those made by Europeans. They did this by stressing in the Japanese media that New York-style products used fun images and bolder colors than Europe. "Japanese consumers are very, very hungry for information" and want to know every detail about a brand, Fiorella said. But Coach's most telling move in Japan was making its bags more affordable than Louis Vuitton's. "The majority are in the $300-$500 range," said Needham & Co. analyst Christine Chen. "Compared with Prada, Louis Vuitton and Gucci, that's a bargain"...The upshot of all these moves is that Coach filled a niche for affordable luxury products that rivals in Japan had ignored...more...
