A purse company founded in 1941 became one of the most successful IPOs of the past five years. From How Coach Won a Rich Purse By Inventing New Uses for Bags:
For generations, it was established fashion wisdom that American women would buy about two purses a year — one for everyday use and another for dressy occasions. But in recent years, Coach Inc. has pushed to make handbags the shoes of the 21st century: a way to frequently update wardrobes with different styles without shelling out for new clothes.Coach was known for decades as a sturdy purveyor of conservative, long-lasting handbags. Following a late-1990s strategic overhaul, it has successfully convinced women to buy weekend bags, evening bags, backpacks, satchels, clutches, totes, briefcases, diaper bags, coin purses, duffels and a mini handbag that doubles as a bag-within-a-bag called a wristlet.
Its strategy is simple: Even in the absence of any obvious need, Coach creates and markets new kinds of bags to fill what it calls “usage voids,” activities that range from weekend getaways to dancing at nightclubs to trips to the grocery store. The company updates collections nearly every month with new colors, fabrics and sizes. It prices bags lower than luxury designers but high enough for women to buy as a special treat.
American women are gobbling up the new options. Coach calculates that in 1988, women purchased an average of 1.9 bags. In 2000, women bought 2.4 bags; this year, they’re expected to buy 3.5.
Coach’s stock — adjusted for two stock splits — has risen 12-fold since its initial public offering in 2000, making it one of the most successful IPOs of the past five years.