Coach will debut its Spring 2026 collection at New York Fashion Week on Monday. The show will draw headlines, but the bigger story is off the runway: In a crowded accessories market, Coach has quietly established itself as a winner, growing sales at double digits while raising prices and adding millions of new customers.
In fiscal 2025, the brand posted its strongest year yet, with 10% revenue growth, mid-teen percentage price increases in handbags, and 4.6 million new customers in North America, with 70% of them being Gen Z and millennials. Coach finished the year with an operating margin of 31%, and parent company Tapestry now targets $10 billion in revenue and mid-30% margins by 2028. The stakes are high: Handbags and small leather goods account for roughly 80% of Tapestry’s sales.
For Scott Roe, Tapestry’s CFO and COO, the results come from seeing the customer differently. “People don’t select, we deselect,” he told investors at the September strategy day. “Price can turn people away in different ways. Sometimes it’s simply too high and out of reach. Other times, discounting too much sends the opposite signal; it makes it look like we don’t value the brand.”
The logic reframes other parts of consumer choice in an age of brand over-communication. Shoppers don’t carefully weigh every brand and product option out there – they cross brands and products off their mental list when they feel irrelevant, overpriced or cheapened, according to Roe. The goal for brands, Roe said in an interview with Glossy after Tapestry’s 2025 Investor Day for shareholders on Wednesday, is to avoid being cut.
That idea runs through Coach’s marketing. The company has pulled back from blanket promotional blasts, expanding its 2024 partnership with Bluecore, a personalization platform, to send fewer but better-timed messages. “Sending 13 emails after someone visits your store doesn’t build loyalty,” Roe said. “It’s about making the first interaction meaningful, then communicating only when we have something relevant to say.”
Sandeep Seth, Tapestry’s president of global consumer and innovation, put it more simply. “The most likely chance of getting a second date is how good the first date was,” he said. “It’s not how many times you call them back or send them texts. That’s the way people feel about brands.”
Technology is helping support this selective approach. In 2024, Tapestry deployed AWS Bedrock to analyze tens of thousands of pieces of store-associate feedback, speeding up fixes to products and service. AWS Bedrock is Amazon’s platform that lets companies use and customize powerful generative AI models through an application programming interface (API), without having to build or manage the models themselves. That same year, Tapestry partnered with retail technology company Lily AI to reframe product descriptions in customer language, cutting down on failed searches. Roe called the approach “magic and logic”, where merchant instinct is backed by machine learning.
At the brand level, Coach has also shifted the tone of its campaigns. Since 2019, it has tripled its marketing investment to about 11% of sales, moving from performance-driven ads to brand storytelling. Todd Kahn, Coach’s chief executive, said the change was overdue. “For a long time, fashion ads were a model with a bag, and then another model with a bag. We anchor our storytelling in something much more profound, like confidence and self-expression, and that’s what creates desire.”
The strategy has paid off. Hero products like the Tabby bag have become icons, selling at full price and trading for double on resale platforms, according to the brand. Across categories, Coach’s average unit retail has risen more than 50% since 2019, yet Roe points out that prices are only now back to 2009 levels. “At that time, the difference between a similar bag from Coach and European luxury was two to three times. Today, that’s five to 10,” he said. “We like that positioning.”
International expansion is the next frontier. In Europe, Coach has been Tapestry’s fastest-growing brand for the past two years, in part thanks to its presence on e-commerce giant Zalando, a platform many luxury peers avoid but one that resonates with younger shoppers. In China, penetration remains under 1% in tier-three and tier-four cities like Wuhan, despite populations in the millions. Many of these urban centers are anchored by large universities, creating what Seth called “a perfect entry point, [where] we can be the brand they buy when they transition from a backpack to their first handbag.” By 2028, Coach expects to expand its footprint from roughly 900 to more than 1,100 stores worldwide to capture that growth.
But risks remain. Heavy reliance on a handful of handbag icons exposes Coach to fashion cycles. A sudden policy change in the U.S. has also introduced new costs: The end of the de minimis duty exemption for imports under $800 is expected to add $53 million in tariffs in fiscal 2026. Roe said Tapestry will offset the drag by 2027, but the episode highlights how quickly external shocks can pressure margins.
The broader question is whether “deselection” is a durable advantage in a market flooded with choice. Restraint sets Coach apart from peers that lean heavily on discounts, over-communication and constant product drops. But if the brand dials back too far, it risks being forgotten. The challenge is finding the balance between relevance and overexposure.
For now, the numbers suggest it’s working. Coach has raised prices, grown its customer base and expanded abroad while maintaining profitability. “We have to make sure we’re never the brand [the customers] deselect,” Roe said.
