Coach and Ralph Lauren have two of the best stories in American fashion today. 

But they aren’t thrillers or tales of derring-do. There’s very little heart-pounding excitement, on the business side at least.  

Instead, both brands are methodical, step-wise case studies on having a vision, a plan on how to grow into that vision and then the fortitude to hold on and stay the course not for months, but for years. 

That patience has paid off big time. 

On Thursday, Coach-parent Tapestry reported that fiscal 2026 sales hit $8 billion, a 17 percent increase on an adjusted basis, hitting its three-year plan in Year One. The company plans to add another $400 million to $500 million in sales this year. While investors recalibrated their sky-high expectations for the brand and traded Tapestry’s stock down, the company still has a sector-leading market capitalization of $25.9 billion.

Similarly, Ralph Lauren Corp.’s market cap stands at $23.1 billion after it said last week that first-quarter sales tallied $2 billion, an increase of 13 percent in constant currencies.

For both, that’s a breakaway stock performance in a world where very few American fashion brands ever see market caps anywhere near that. By comparison, the once-red hot VF Corp. is valued at $5.8 billion, followed by Tommy Hilfiger and Calvin Klein parent PVH Corp. ($3.8 billion), Under Armour Inc. ($2.3 billion) and Michael Kors parent Capri Holdings ($1.8 billion).  

Ralph Lauren and Coach have each taken a similar path to the top. 

They have tightened distribution, focused more on their own retail, pulled back in outlets, cut the number of styles produced, zeroed in on higher-priced categories and invested more money into marketing to fuel full-priced sales. 

It’s a strategy that’s easy to articulate and hard to follow.

Where Coach and Ralph Lauren have succeeded, the other companies listed above have set out on a similar path, but not seen the same results. 

Why does this brand elevation strategy work? And why isn’t it working for everyone?

Interviews with the chief executive officers of both Tapestry and Ralph Lauren, a former chief financial officer who was key to both turnarounds, Wall Street analysts and retail professors suggest that it’s a moment-to-learn, lifetime-to-master kind of strategy. 

The short of it is that:

Think of it as the fine art of getting consumers to spend more — and like it. 

Here, a closer look at how it’s done. 

Jane Nielsen’s Take

If there’s a common thread between the turnarounds at both Coach and Ralph Lauren, it’s Jane Nielsen. 

After 15 years at PepsiCo, she was CFO at what was then Coach Inc. from 2011 to 2016, when she jumped to Ralph Lauren for an eight-year run that started as CFO and ended with her as chief operating officer as well.  

Nielsen helped start Coach’s brand elevation strategy and then took that experience to Ralph Lauren, which was starting on its evolution under former CEO Stefan Larsson. In both cases, Nielsen’s background in consumer products — where margins are slight and operations are tight — helped bring a little more rigor to the artier approach fashion companies favored.  

“At both Coach and Ralph Lauren, a part of the success was clearly defining a strategy,” Nielsen said. “That strategy, I know it can be boring, but the strategic pillars didn’t change radically.  They would evolve, the tactics would evolve, and your metrics would evolve as you improved. But the fundamental strategy was pretty straightforward and pretty simple and could be communicated broadly and consistently. 

“What do you want the organization to do?” she said. “What are your linchpins that you are going to follow, measure, live by, edit initiatives by? And that widely communicated, well understood, not ever-changing strategy is part of the secret sauce. There’s so many things these companies can do, but just because you can do it doesn’t mean you should do it. The shoulds and the must-dos are articulated in the strategy.”

The process at both Coach and Ralph Lauren started with a deep dive into the consumer. 

“What do they love about us? How do we stay true to that? How do we understand where we’re not exceeding their expectations and attacking that directly? And where do they love us, think we ought to be, and where we’re not?”

At Ralph Lauren, the exercise turned up the insight that consumers would turn to the brand for many categories that the company had not seen as part of its core, including outerwear, sweaters and handbags. 

The idea was to get into those businesses in ways that elevated the brand, driving average prices higher, while at the same time reducing lower-price sales at T.J. Maxx and other discount channels. 

“The answer is to continue growing the healthy parts of your business and accelerating into new parts that can give you the latitude to correct some areas where you may be disappointing or underserving your consumers,” Nielsen said.  

“We had Purple Label and Polo, and there was a lot of white space where Polo ended and Purple Label picked up,” she said. “That was all [average unit retail price] accretive when we filled in that white space so that there was a continuous line. 

“There was a lot of room for the bear sweater, the flag sweater, the washable cashmere hoodie that had a lot of AUR growth while it was meeting a true consumer need,” she said. “The consumer didn’t feel, ‘Boy, I bought a cable knit cotton sweater and I bought a washable cashmere hoodie.’ They don’t view that as a price increase. It will show up as an AUR increase. And it’s the outcome of a strategy to service the consumer for different needs, different tastes, different occasions. And that to the consumer feels great.” 

A Journey, Not a Destination 

Ralph Lauren has kept to the strategy, recording a 15 percent increase in AUR in its own direct-to-consumer business in the first quarter. 

That marked over nine straight years of AUR growth every quarter for the brand. 

But current CEO Patrice Louvet described higher AUR as an “outcome of our elevation strategy” and not an “objective.” 

“AUR has four factors,” the CEO said. “First, it’s driven by region and channel mix. The second is product category mix. The third is promotional pullback. And then the fourth one, which is a much smaller part, is like-for-like pricing. That is not the key driver of AUR. The drivers of AUR are more mix and promotional pullbacks.” 

It’s bringing a touch of the consumer products science, which Louvet knows well as a Procter & Gamble veteran, to fashion, where heart has historically led all. 

“I found coming from a different industry that this industry was very driven by the vision of the designer, as it should be,” Louvet said. “But that really can’t scale if you’re not also really focused on who is the consumer you want to serve, what inspires them, what is their competitive set? What is the decision process? And how do you make sure you delight them through that?”

‘Structural Advantage’

“We’ve always had quite a bit of respect for the data side of it, understanding the consumer,” said Tapestry CEO Joanne Crevoiserat, adding that Coach was once owned by consumer products giant Sara Lee. 

But lately, the company has been doubling down.

“It’s not just about having the data,” Crevoiserat said. “It’s going a click deeper and getting the understanding, the deep understanding of the consumer. But then our creative teams are leveraging those insights to inform their creativity. And we’re bringing even more creative solutions and more innovation to market.”

She described the “muscle memory” of not just getting the consumer insight but getting it to people who can use it as “a very big competitive lever.” 

“It’s a structural advantage of our business going forward,” she said. “We have the confidence now to know that our strategies are working and that the capabilities that we’ve developed over the last few years are paying off. We’re not resting. We talk a lot about playing offense and staying on offense.”

But even knowing the play inside and out doesn’t make it easy to run. 

Tapestry also has Kate Spade, which has been in turnaround mode for a long time and is just finishing up the painful streamlining part and is starting to build the foundation for growth. 

Staying the Course

Crevoiserat has a little more leeway with the Kate Spade turnaround as Coach is really carrying the larger company right now. 

CEOs pushing through reinventions without the benefit of a highly profitable powerhouse brand are forced to go to Wall Street with only the promise of better, stronger growth ahead after a period of decline. 

“We are all trained to chase growth,” said Simeon Siegel, an analyst at Guggenheim Partners. “We’ve all heard growth is oxygen, growth is life, stagnation’s death. It’s very hard for a leader to ever truly entertain the idea that they couldn’t be better by being smaller. 

“What did Ralph and Coach do more than anyone?” he said. “They committed to raising price, volume be damned. They committed to raising price even though that would drive revenues down. You cannot restructure and grow in the same sentence.”

Siegel said that turnarounds were one of those things that could probably be executed more easily by a robot — too much messy human psychology gets in the way.

“Because it’s a multiyear process, it’s very hard for public companies to do. You need to get in front of the public at least four times [once each quarter] and say revenues are down 20 percent to 30 percent and that’s OK.

“They build up the mental fortification to do that once. And then they believe they can do it twice. By the third quarter, people feel like they’re supposed to be delivering results already that show what they’re doing is right,” he said. “And that’s just not reasonable. And so you need that mental fortitude to say, this brand still sells a lot of product, but it sells too much.”

This just goes against the life lessons of so many CEOs, who don’t generally get their job by saying how good they are about giving away sales. 

A Brand to Build On

Part of the problem might be that, while there are a lot of really well known brands, there are fewer Ralph Laurens. 

“There’s a lot of brands that go into sort of terminal decline and never recover,” said David Swartz, analyst at Morningstar. “There’s others that people are trying to resurrect and sometimes that has been done successfully.”

The difference is not in just the plan or the management. 

“We judge the moats of companies, meaning their competitive advantages,” Swartz said. “These companies we’re talking about, they don’t have any real competitive advantages in the sense that they can’t prevent new entrants. 

“There’s essentially no barriers to entry in apparel and accessories,” he said. “And there’s new competitors coming all the time. So we would classify the advantages if they have any as intangible. That’s based on a lot of different things, including the brand’s history, the brand’s marketing, the quality of the products, the quality of the distribution, things like that. And they do differ. 

“We have always said that Tapestry/Coach has a competitive advantage, but Capri/Michael Kors does not,” the analyst said. “And that’s because, in my judgment, which is based on the financials of the companies and their history and what I think is the consumer perception, I think Coach is a stronger brand than Michael Kors to begin with. The results that we’ve seen over the last few years certainly suggest that. They compete in the same market. They have very similar products. And yet Coach has been doing really well and Michael Kors has been struggling.” 

Restarting on the Outs

The good news for aspiring turnaround artists is that one does not need to be on trend to start building better. 

Laurent Vasilescu, an analyst at BNP Paribas, pointed out that the relatively dressy Coach and Ralph Lauren began their elevation journeys in the 2010s, when athleisure and Lululemon were dominating the market. 

“Most people look at the top line as an indicator of brand health,” Vasilescu said. “But the important metric is the gross margin. We need to look at the second metric — and that’s the health of the gross margin.” 

Ralph Lauren logged gross margins of 69.9 percent last year, up 1,200 basis points from the 57.9 percent gross margin the company logged just before Louvet joined in 2017.

“This is absolutely the Ralph Lauren playbook, the Tapestry playbook — reinvesting those gross profit dollars into marketing,” Vasilescu said. 

Ralph Lauren spent 8.2 percent of its sales on marketing last quarter, more than double what the company was spending before the brand elevation pivot. 

While many have struggled to run the play, others are making some real headway. 

“Levi’s is the one that’s closest,” Vasilescu said. “You think about what they’ve done under [CEO] Michelle Gass. She’s been in the seat for about two years and it’s like, let’s get rid of Dockers. Let’s elevate, get rid of Denizen and elevate with Blue Tab. This elevation, paring down, going more into DTC, holding back on wholesale. Right now they’re at 50-50 DTC and wholesale and increasing in their marketing spend.”

Two-way Street

Exactly how to reinvest in the business — from marketing to product to infrastructure — is another trick. 

Jaehee Jung, professor of fashion and apparel studies at the University of Delaware, said: “Quality control is very, very important because consumers are savvy. They can buy any bag they want to. And there are many of the same styles of bags at similar prices. You want to make sure that really the product stands for quality.” 

And Jung said that often requires a certain communication between brand and consumer, a “two-way process” that can “create some meaning” for shoppers.  

Fashion can no longer speak from on high.

“The communication can come [one way] from the brands and they can do whatever, like a very expensive campaign,” Jung said. “But when consumers don’t get it or they don’t feel that their products are really giving any kind of satisfaction psychologically or maybe social effect, like other people have it, I want to have it, then it’s not going to work.”

Be Yourself

Sang-Eun Byun, associate professor of retailing at the University of South Carolina, pinpointed four factors that are key to a brand’s long-term health and a successful turnaround.  

Byun pointed to Victoria’s Secret & Co., which languished for years but is now getting its stride back under CEO Hillary Super. 

“Victoria’s Secret tried to rebrand and they included diversity and inclusion, that kind of concept,” she said, of former management. “They just tried to change or manipulate the marketing aspect rather than truly changing or evaluating their brand identity at the core. 

“They have to know who they are first. And then based on their brand identity, they have to work on marketing. I think they did the opposite. They first decided, oh, we’re going to do the premium brand. We’re going to embrace the diversity and inclusion. And then they focused on just one aspect of marketing. They didn’t think about what the audience really thought about them. So authenticity was absolutely lacking.”

While the company continues to embrace diversity, Super is now unapologetically emphasizing Victoria’s Secret’s sexy attitude. 

“People now see that’s their true intention,” Byun said. “They invite people, real people to participate in their fashion show. The audience engagement matters. And through their audience engagement, people know Victoria’s Secret’s authentic intention. 

“The branding should come first,” she said. “Branding should support marketing decisions.” 

So brands looking to turn around just need to be themselves, know and talk to their consumers, draw people in with knockout marketing and deliver great product, while keeping up with technology, building first-rate production capabilities, navigating a global market, the economy and more.

Easy to say, hard to do.