By Editor,Sophie Gable
Copyright dailymail
US designer labels have been making a bigger investment in their image – and it’s paying off.
Ralph Lauren and Tapestry, which owns Coach and Kate Spade, have climbed in the stock market by 29 percent and 55 percent, respectively.
And while sales for European luxury brands like Hermès and Brunello Cucinelli dip, American staples like Coach and Ralph Lauren are growing, according to the Wall Street Journal.
Coach increased sales by 13 percent this year, while Ralph Lauren increased sales by 11 percent. The two topped the list in the luxury goods industry, with Brunello Cucinelli in third, Hermes in fourth, and Richemont in fifth.
Tapestry also topped the list of total annual shareholder returns over the last five years, which measures how much an investor receives from stock, according to FactSet.
Tapestry specifically beat company expectations in the third quarter of the year, rising 8 percent in revenue to $1.6 billion.
Coach was the top performer of the fashion house and achieved its highest gross margin in history.
The American brands have invested in their image, with both companies increasing their advertising budgets, according to the Wall Street Journal.
‘By successfully scaling, targeting multiple income levels, and spending heavily on online engagement, Coach and Ralph Lauren, along with a few other brands, have not only followed up to but, in certain respects, surpassed European counterparts in terms of relevance and sales growth,’ Julia Pukhalskaia, a renowned fashion stylist and CEO of the global clothing brand, Mermaid Way, told Daily Mail.
In – Affordable luxury, Out – Spending a fortune on a bag
Coach and Ralph Lauren have a lower price point than European brands, which has become a priority as Americans shift towards ‘affordable luxury’.
Baruch Labunski, founder and CEO of Rank Secure, a digital marketing company, told Daily Mail, ‘The “affordable luxury” trend is growing in practically every type of product, with fashion being the most obvious.
‘Ralph Lauren’s and Coach’s price points put them in the perfect position to make the most of the trend’.
As recession fears loom for Americans and Donald Trump’s tariffs have emphasized US products, buying European brands has become increasingly unpopular.
Especially for Gen Z, more affordably priced brands allow them to purchase luxury goods that they otherwise couldn’t afford.
Hermès’ legendary Birkin bag is now on the market for upwards of $13,000. Earlier this summer, Jane Birkin’s original bag sold at an auction for $10 million.
Meanwhile, Coach bags tend to sit in the $200 to $500 range, with some products, like the Coachtopia Loop Flat Tote, being as low as $195.
The Ralph Lauren Alligator Tote sells for a whopping $28,000, but the brand also sells multiple purses under $500.
The Polo ID Calfskin Mini Shoulder Bag in Chianti and Mustard is on sale for $299.99, a notable contrast from European brands.
Pukhalskaia noted that during times of economic turmoil, brands placed in the ‘affordable luxury’ category perform better than those that are ultra-exclusive.
‘European brands like Hermès, Brunello Cucinelli, and Prada still lead the ultra-luxury space but are founded on scarcity, craftsmanship, and rarity,’ she said.
Pukhalskaia added that although Hermès is still praised for its prestige, the company’s growth is limited by a high-end price cap.
While Brunello Cucinelli is known for its craftsmanship, the brand remains more niche and doesn’t have the mainstream appeal of Coach and Ralph Lauren.
Finally, Pukhalskaia noted that Prada has championed sustainability and innovative designs, but failed to generate excitement among younger generations.
Coach’s success
Coach is climbing in popularity, cracking the top five hottest fashion brands on the Lyst Index, a quarterly ranking of the most popular fashion brands.
Pukhalskaia argued that Coach was once considered a ‘mall brand’ but has nailed its rebranding strategy, bringing back staples like the Tabby bag, prioritizing social media advertising, and introducing trendier lines.
Coach’s Tabby bag gained popularity among younger audiences, and the brand’s emphasis on bag charms achieved great success.
The brand shifted its marketing strategy away from associations with its traditional old-money aesthetic towards personalization to attract Gen Z audiences.
Starting in 2023, Coach launched an immersive experience called Coach Play, transforming locations into interactive spaces.
The brand also brought in Elle Fanning as the face of their campaign, launching an ad earlier this year with the actress parading around New York City in a nod to Coach’s roots.
The company’s CEO, Joanne Crevoiserat, told investors in May that Coach’s success is ‘compounding,’ Vogue Business reported.
‘Our talented global teams drove accelerated top and bottom line growth against an increasingly complex backdrop, clearly demonstrating the power of consistent brand-building and our connections with consumers around the world’.
Ralph Lauren’s success
Meanwhile, Ralph Lauren received one of the best valuations in the American fashion industry with a market value of $16 billion.
Ralph Lauren has stayed consistent with its branding, advertising as an ‘aspirational American luxury,’ Pukhalskaia said.
The brand has focused on its staples like blazers and cable knit sweaters. Ralph Lauren also saw a boost for dressing the US Olympic and Paralympic teams in Paris last year.
The company has dressed the teams since 2008 and is expected to continue until their deal expires in 2028.
Ralph Lauren launched a viral campaign this summer featuring Black men, women, and children in Oak Bluffs, a section of Martha’s Vineyard that was historically a destination for middle-class Black families to vacation.
In contrast with American Eagle’s controversial jeans campaign featuring Sydney Sweeney, the ad was celebrated for championing diversity and paying homage to the historical significance of a coastal enclave.
The company’s success has resulted in it creeping up the Lyst Index, cracking the top 20, and outranking Balenciaga and Gucci.
