In the fashion industry, it’s no secret who dominates when it comes to conglomerates. Europe, specifically France, houses the world’s most famous and successful fashion companies such as Louis Vuitton and Moët Hennessy and Kering (LVMH). LVMH owns over 50 brands, including Louis Vuitton, Givenchy, Fendi, Marc Jacobs, Loewe, Christian Dior and Celine. Kering encompasses brands such as Gucci, Bottega Veneta, Saint Laurent, Stella McCartney, Alexander Mcqueen and Balenciaga.
If Americans want to rise to the competition of the LVMHs and Kerings of the world, then they have their work cut out for them. However, just because the U.S. hasn’t yet created a fashion company that rivals the success of the European conglomerates doesn’t mean they won’t.
Take Coach, for example – CEO Victor Luis set out to create the first New York based house of modern luxury brands, and took its first step toward this end by purchasing Stuart Weitzman for $574 million in 2015. Seen on celebrities such as Jennifer Lawrence, Emma Watson and Gigi Hadid, Stuart Weitzman has been known to have a high-end reputation, thus enabling Coach to reinforce its fresh, high-end image.
In its next attempt to change its brand perception, Coach selected Selena Gomez, the most followed person on Instagram with 124 million followers, as its new ambassador.
Most recently, in May of this year, Coach acquired Kate Spade for $2.4 billion.
Aside from revamping the brand from the outside, Luis has made significant internal changes within the Coach by limiting markdowns, innovating new products and making price adjustments. The company closed its underperforming stores and outlet presence, which was diluting and hurting their brand image.
Although Luis has adopted many of the European brands’ business models, he also has an interesting and refreshing outlook on Coach’s future. Rather than following traditional luxury brands, Luis has different plans for Coach by focusing on approachability rather than exclusivity. Coach can target the middle class in Europe, the United States, and Asia, whereas other modern luxury brands cannot. This focus could give Coach an edge and allow them to stand out from the other conglomerates’ steep prices that are not as accessible to the middle class.
While Coach has big plans for their future, they are not the only ones with goals to compete against the most successful companies in the industry. Just recently, Michael Kors bought Jimmy Choo for $1.2 billion. Unlike Coach, which bought Kate Spade after it became more successful, Michael Kors has been struggling lately, and acquired Jimmy Choo before they fixed their own challenges. It could be ambitious for Michael Kors to turn itself around while simultaneously growing its empire with other brands. Jimmy Choo definitely gives them exposure to the luxury market, but could this acquisition just distract Michael Kors from its own struggles?
While American brands have tried – and failed – to create a conglomerate that rivals Europe’s, we might be entering a new era. It remains to be seen how this American conglomerate could affect the fashion industry, but among the future’s ambiguity is one certainty: Coach is not finished trying.