Coach Is Having a Bad Week

You might say the backlash is "sustainable."

This post is the sort of thing that you probably would not read in ad-funded fashion media. The best way to support independent fashion journalism like this newsletter is to tap to subscribe and share this post.

Well the PR department for Coach must be working overtime this week following the TikTok video by Anna Sacks showcasing handbags that look like they lost Squid Game. Sacks said she bought them from fellow influencer @DumpsterDivingMama Tiffany She’ree, and planned to take them to Coach for repair as part of its — warning: buzzwords ahead — “(Re)loved” bag recycling program that promises to “make fashion circular.” Coach is among a slew of brands that destroy merchandise that seems perfectly good, but which they portray as actually not fit for sale.

After Sacks’s video went up, Coach’s Joon Silverstein, “global head of sustainability and digital,” called up Women’s Wear Daily for damage control:

“First, reducing waste is one of the most important strategies,” Silverstein said. “When it comes to damaged or defective product, we have been working on many avenues….It’s unfortunate these posts came out now, because we had been doing this thoughtfully.”

The brand operates four pillars, including restored, vintage, up-crafted and remade “intended to address products at any stage of end-of-life,” per Silverstein, within its long-running Repair Workshop and relatively new (Re)Loved program which launched in April.

In her TikTok, Sacks said that Coach, one of the brands in public company Tapestry’s portfolio, does not disclose the practice of destroying merchandise. The company’s recent annual filing does include, however, discussion of its evolving moral compass.

As a people-centered and purpose led Company, Tapestry’s corporate responsibility framework, Our Social Fabric, unites teams across the Company’s business to work to meet our 2025 Corporate Responsibility Goals and a shared objective: to create the modern luxury company of the future that balances true fashion authority with meaningful, positive change.

The three pillars of this initiative include “Our People,” “Our Planet,” and “Our Communities.” This menu of values states, for instance, that the company will hold executives to account for equity, inclusion, and diversity (“EI&D”) goals by tying 10 percent of their bonuses to meeting them. Under “Our Planet,” the company says it plans to “reduce our impact on climate change with a focus on renewable energy, increased use of environmentally preferred materials and production methods, and circular business models that design out waste and pollution, keep products in use, and restore natural systems.”

Sacks said in her TikTok that Coach claims a tax benefit on the destroyed merchandise, but Coach denied that to the Business of Fashion. Plus, it’s not like they’re hurting for tax breaks at the moment. Thanks to the CARES Act and other pandemic-inspired global tax relief programs, the company received $90.5 million in tax benefits in the 2021 fiscal year.

Coach has gone out of its way to point out to media outlets that the destroyed merchandise represented “less than” (per Fashionista and WWD) or “around 1 percent” (per BoF) of its global sales, but those totaled $4.25 billion for fiscal year 2021. Which means, if we go with the “around 1 percent” figure, the company destroyed around $42.5 million worth of merchandise. But hey, “less than/around 1 percent” sounds a hell of a lot more innocent and less bad than “$42.5 million.” The brand then announced on Instagram that it would stop “destroying in-store returns of damaged and unsalable goods.”

A post shared by Coach (@coach)

Destroying merchandise is hardly unique to Coach, as Sacks documents in her TikTok feed, highlighting some non-fashion offenders, like Hallmark. Yet Victoria’s Secret, Ralph Lauren, Burberry, H&M, and Nike have all received backlash in the last decade or so for doing the very same thing. Following a public outcry, Burberry pledged in 2018 to stop destroying merchandise, after it revealed in its annual report that it was burning $37 million worth of stock in order to protect its “brand value.”

Around this time, Chavie Lieber dug further into this issue for Vox in an interview with Tim Rissanen, then a professor of fashion design and sustainability at Parsons. Basically, fashion companies do this to prevent their merchandise from being given away for free (because then, why would you buy it?) or deeply discounted, thus devaluing a brand. The Q&A is worth reading in full, but this stands out in particular:

Chavie Lieber

Wouldn’t they rather earn a profit than nothing at all? Wouldn’t Chanel prefer to mark down its $3,500 bag by $300 and still make $3,000?

Timo Rissanen

This is where we get to the thing that nobody wants to talk about: The retail price of a luxury product has nothing to do with its actual value. When you buy something from Chanel or Gucci and you pay full retail, that money is actually paying for the massive advertising campaigns. If Chanel destroys a dress it tried to sell for $1,200, it hasn’t really lost $1,200. I don’t think Chanel even paid $100 [to make] that dress. And the money they’d lose would probably just be recouped through fragrances.

Silverstein, Coach’s spokesperson on this issue, said in WWD, “Over 40 percent of our retail stores have stopped damaging product” — which suggests that over 50 percent of retail stores hadn’t stopped damaging product.

I can imagine Coach executives sitting in their Zoom meetings this week ripping their hair out over how unfair it was that they’re the ones who got caught destroying stuff by a concerned citizen with a TikTok feed when so many brands do it and have historically done it, and perhaps even to a worse degree than them. Right after (!) they launched a bag recycling program. I can also imagine that people who work at Coach, as humans who have to live on this earth and breath its air, actually do care about climate change. Besides, as the company’s annual filing notes, it has an economic incentive to do its part in the fight against a warming planet:

Our business is susceptible to risks associated with climate change, including through disruption to our supply chain, potentially impacting the production and distribution of our products and availability and pricing of raw materials. Increased frequency and intensity of weather events (storms and floods) due to climate change could also lead to more frequent store closures and/or lost sales as customers prioritize basic needs. There is also increased focus from our stakeholders, including consumers, employees and investors, on corporate responsibility matters

Tapestry has committed to “procur[ing] 100% renewable energy in the Company’s stores, offices and fulfillment centers by 2025.” However, it explicitly makes no guarantees it will actually reach these goals.

Although we have announced our corporate responsibility strategy and 2025 Corporate Responsibility Goals, there can be no assurance that our stakeholders will agree with our strategy or that we will be successful in achieving our goals. Failure to implement our strategy or achieve our goals could damage our reputation, causing our investors or consumers to lose confidence in our Company and brands, and negatively impact our operations. Even if we are able to achieve our 2025 Corporate Responsibility Goals, our business will continue to remain subject to risks associated with climate change.

Well, at least they can say they warned shareholders about the very thing happening this week. For all the fashion industry’s talk about “sustainability” as it pertains to runway collections and fabric choices and whatnot, it’s hard not to view various efforts billed as eco-conscious as mere attempts to capitalize on a younger generation’s social conscience.

Coach is just one example of a fashion brand caught between business and morals. The fashion industry’s work to become a less environmentally damaging industry should begin with transparency. Ideally, that would come from the companies themselves, but that seems about as likely as Coach swapping that 1 percent figure for $42.5 million in its talking points. So we’re left with Sacks and other concerned citizens with TikTok feeds to hold the industry to account.

This email is free, so feel free to forward it.