The world of luxury fashion is stirring up a debate! Coach's ex-CEO, Lew Frankfort, has sparked a controversial opinion: the best-value bags should be crafted outside the US.
But why would a renowned fashion executive make such a statement? Well, it's all about the bottom line. Frankfort argues that producing bags overseas is the key to maximizing profits while offering customers top-notch value. This perspective comes at a time when many companies are reconsidering their manufacturing locations due to tariff troubles.
In a podcast interview, Frankfort was asked about the feasibility of profitable bag production in the US amidst the Trump administration's tariffs. His response? It's possible, but not the best strategy for value. He believes that the finest materials and craftsmanship can be sourced globally, and that's the secret to providing customers with exceptional value.
Here's the twist: while tariffs are a current challenge, Frankfort predicts a return to a global economy. He sees the tariffs as a temporary hurdle, emphasizing that long-term success lies in embracing the global market.
Coach, a brand with humble beginnings in NYC, now primarily manufactures in Asia. Its parent company, Tapestry, has seen impressive sales growth, with a 14% increase in the latest quarter. Meanwhile, LVMH and Apple are considering US production, but Kering, the parent company of Gucci and YSL, disagrees. Kering's CEO asserts that moving production out of Europe would be counterintuitive, as it's integral to their brand identity.
So, should luxury brands prioritize profit or tradition? Is Frankfort's perspective a savvy business move or a controversial strategy? The debate is open, and we'd love to hear your thoughts!
