With a Chain of Coffee Shops, Coach Wants to Be Gen-Z’s New Mall Hangout

Coach has a new line of business: coffee.

The handbag brand owned by Tapestry Inc. will open more than 20 cafés inside retail and outlet stores in the next year, with plans to expand to dozens more locations in the coming years. Dubbed “Coach Coffee Shop,” the concept was developed by creative director Stuart Vevers and first piloted in Jakarta, Indonesia in 2024, where Coach also opened a full-service restaurant. Two US locations followed earlier this year, in Tinton Falls, New Jersey and Austin, Texas.

The New Jersey location mimics the no-frills steel counters and backlit wall menus of a New York City corner coffee shop. Coach iconography is everywhere, from a “C” monogram frothed into the microfoam of lattes to cakes molded to look like tiny, candy-coloured Tabby bags. Customers can wipe up any spills with napkins printed with Lil Miss Jo, a smiling coffee cup mascot specially designed for the shops that can also be found on bags, mugs and other merchandise only available in the cafés. The Lil Miss Jo tote has become something of a collector’s item: on resale sites, it sells for upwards of $180, or nearly double its $95 retail price.

Coach is following a hospitality playbook pioneered by Ralph Lauren, which over the last decade supersized the well-worn concept of the in-store cafe. Since opening the first Ralph’s Coffee inside its Midtown Manhattan flagship in 2014, the brand now has more than 30 locations around the world, along with a growing number of high-end bars and restaurants. Marcus Sanders, who is the head of Coach’s newly formed food and beverage division as of October, previously served as vice president of Ralph Lauren Hospitality.

Both shops feature surprisingly affordable — to customers used to New York Starbucks prices, at least — coffee and snacks, exclusive merch and wall-to-wall branding. Perhaps the biggest difference between the two fashion-themed coffee chains is where you’ll find them. Ralph’s Coffee is typically found inside flagships in major cities; Coach is mostly opting for outlet malls, where there are fewer competing food and beverage options. The two will compete head-on when Coach Coffee Shop opens next month at the Woodbury Commons outlet mall outside New York, where Ralph’s Coffee already has a location.

Fashion brands often get into hospitality as an exercise in world building, a way to connect with customers without requiring them to shell out several hundred dollars for a handbag. But Coach Coffee Shops aren’t mere branding exercises, Coach chief executive Todd Kahn told The Business of Fashion. Already, the three existing coffee shop locations are profitable as standalone entities.

“I’m not saying all 1,000 Coach stores will get coffee shops — they won’t — but there’s a huge opportunity for a lot of growth for the next three to five years,” said Kahn. “This is not a vanity project. It’s not just a marketing initiative; it’s a commercial idea.”

The Hospitality Equation

Even if Tabby-shaped cakes and latte art turn out to be a lucrative business for Coach, the most important function of its coffee shops is harder to quantify: whether they increase what Kahn calls “linger” time. In other words, the longer a customer spends in Coach’s world, the more likely they are to buy something. Tinton Falls’ Coach Coffee Shop, for instance, has its own entrance, but the space opens directly into the brand’s outlet store.

“It’s a lower price point, so there are younger consumers who are able to come more often and experience our brand, maybe through a strawberry matcha and also be able to hang out and think about us for their first purchase in the future,” Sanders said.

Coach’s café concept is targeted squarely at Gen Z, the young consumers who have propelled the brand’s post-pandemic resurgence. In its last quarterly report, Coach posted sales growth of 13 percent. Last year, the brand surpassed $5 billion in annual net sales for the first time — up from $3.5 billion in 2020.

There are early signs the coffee shops are connecting: On TikTok, the Tabby cakes and Lil Miss Jo logo have gone viral, and lucky fans who have been able to visit report long lines at the existing locations.

A number of recent studies, meanwhile, indicate that despite their digital native upbringing, Gen Z-ers embrace brick-and-mortar shopping far more than Millennial and even Gen X consumers.

“For Gen Z, what happened is that so many of their foundational moments were spent virtually, so the ability to take it back and go to the mall is critical,” said Sanders. “They simply just want to hang out.”

The Business of Novelty

Coach Coffee Shops are just one of the brand’s investments in experiential retail. Coach Play is another concept, with 12 outposts around the world designed based on each market and its local preferences, featuring vibrant interiors meant to be photographed, personalisation stations and events spaces.

In Malaysia, Coach operates a store dubbed Coach Airways housed inside a real Boeing 747 aircraft. Later this year in Singapore, Coach will open its second fully branded restaurant in Changi Airport.

The coffee shops have one other key function: They provide a place for what Kahn calls the “non-shoppers” — typically dads and boyfriends — to hang out.

“Sometimes what happens in the real world is that the non-shoppers are taking up my limited seating in the footwear salon,” he said. “Now I can move them to the coffee shop …, where they’ll have a wonderful, compelling coffee experience while the actual shoppers get to spend more time in the store.”