U.S. bag-maker finds fans in Japan
By Yuri Kageyama
Associated Press
TOKYO — Walking down a street in Tokyo, it doesn't take long to spot women clutching Coach bags.
Chiaki Tsukumo • Associated Press
Coach, the New York-based maker of fine leather goods, is succeeding where other American companies have struggled, winning over finicky Japanese customers who have long preferred European and homegrown brands.
Sales clerk Miki Miyamoto shows a Coach bag to Akiko Yamaguchi, center, and her mother, Yumiko, in the company's Tokyo outlet. In Japan's highly competitive market, where American companies have struggled to win over finicky shoppers, Coach is proving to be one outstanding exception.
With more than 100 retail outlets in Japan, Coach's sales here tripled over the past three years to about $270 million and business in Japan now makes up more than a fifth of its global sales.
Japanese buyers are passionate about the leather and fabric bags and totes.
"I've always wanted a Coach bag," said Akiko Yamaguchi, a university student visiting a Coach store with her mother, who bought two bags for her daughter's 20th birthday. "I'd like to buy lots more if I can."
Coach is so popular that, at the recent opening of its store in the northern city of Sapporo, dozens of women lined up to be among the first to set foot in the shop.
Known for its craftsmanship, Coach is now the No. 2 imported bag and accessory brand in Japan in sales, just trailing France's Louis Vuitton, a favorite here for decades. Coach sells in department stores around the country, and it has four flagship boutiques devoted to its products, with two more opening this year.
"We have a unique brand proposition. We are an accessible luxury accessories brand in which we offer extremely well-made products that are relevant to Japanese consumers' lifestyles at very attractive prices," Coach chief executive Lew Frankfort said during a recent visit to Tokyo. "We think the opportunities are abundant."
Coach keeps prices down — as much as half or a third of European rivals — by maintaining low-cost suppliers and producing the bags in Chinese plants where workers are trained and supervised by Coach to maintain quality.
Still, the bags are not cheap, giving them the luxury-goods aura Japanese shoppers demand. A Coach tote costs about $700, but smaller bags cost about $400.
It has also helped Coach that the Japanese culture is brand-conscious. Even in the samurai era, people kept abreast of fashions, coveting brands in noodles, kimonos and bonsai plants. Being out of touch with what's hip is potentially embarrassing in Japan, and even costly for your career.
"Coach is a case study in cracking the Japan luxury market," said Naomi Moriyama, president of New York-based The Moriyama Group, a marketing consulting firm. "Coach is winning in Japan because of intensive consumer research, superb product quality and customer service, stunning new stores and a constant flow of new products."
Japanese are snatching up Coach bags not only in Japan, but also abroad as tourists. The same handbags are cheaper overseas because of Japanese taxes on imports as well as the costs of shipping and store space here. And some Japanese women say their loyalty to the Coach brand developed during shopping trips abroad.
Moriyama said Japan is filled with serious "power-shoppers," who see collecting brands as critical for status.
Many are single women who live with their parents, but a growing group of brand-conscious "power seniors" and women executives are likely to keep this nation an important market for years, Moriyama said.
Stuck in small cramped homes, Japanese tend to splurge on things like bags rather than larger goods like fancy furniture. A Japanese woman spends four times her American or European counterpart on accessories, according to Coach.
"The leather on Coach bags is so soft, and the designs aren't as cluttered as other brands," said Shizuyo Sakabe, a 47-year-old housewife, who owns a Coach bag and wallet.
She summed up the feelings of many others: "I love Coach."
