Coach Works with Mickey Mouse to Boost Handbag Sale

July 6, 2016

At almost 90-years-old, Mickey Mouse is, without a doubt, one of fashion’s hardest working style icons. From Madonna in those big, black ears to Carrie Bradshaw in her vintage yellow tee on Sex and the City, Mickey has long been loved by fashion’s tastemakers. And the past few years have been particularly busy for the world’s most recognisable (and loved) cartoon character, with starring roles in collections from brands including Commes des Garcons, Marc Jacobs and Opening Ceremony.

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Victor Luis, chief executive officer of Coach Inc., has a strategy to make the brand more edgy and cool: a cheeky Mickey Mouse sticking out his tongue.

The implementation of the Walt Disney DIS -0.38% character is part of Coach’s Chief Executive Officer Victor Luis’s plan to revive the brand, making it more “edgy and cool” with pop-culture icons and limited edition products. The company hopes that this will encourage shoppers to not only buy a new handbag, but to purchase it at full price.

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And it appears to be working. Since the launch of the Disney handbags on June 17, several of the items have sold out online, including all four colors of the $395 “kisslock” handbags that are designed in the shape of Mickey’s ears. Even the large leather Mickey Mouse dolls and bean bags—which go for $1,500—have sold quickly, according to Bloomberg.

Coach is trying to restore its cachet after mounting competition, sluggish demand and heavy discounting led to two years of declining sales. The New York-based company has been remodeling stores, stepping up its marketing and releasing fresh products and designs from creative director Stuart Vevers, aiming to win back customers from Kate Spade & Co. and Michael Kors Holdings Ltd.

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Coach’s earnings growth rebounded last quarter, and Luis is cutting costs as part of his turnaround effort. The stock gained 22 percent this year through Wednesday, outpacing the 1.5 percent gain of the Standard & Poor’s 500 Index.

Selling limited-edition items, such as the Disney products, helps ensure that they don’t end up in the discount bin, said Michael Binetti, an analyst at UBS Group AG. They have more “scarcity value,” he said.

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And the strategy is a better way to increase traffic than just offering coupons and promotions, he said.

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