Mickey Mouse toothbrushes. Minnie Mouse watches. Toys, T-shirts and trinkets. No matter what it is, there’s a Walt Disney Co. character that can seemingly be included in it, on it, or molded into the shape of it.
Is there a brand or product that simply shouldn’t be Disneyfied? Incredibly, the answer might be no.
“Grandmas and kids alike like Mickey Mouse,” said Brien Rowe, managing director of investment banking in D.A. Davidson’s active lifestyle group. “You’re almost guaranteed success when you collaborate with Disney on one product line or another.”
Disney DIS, +0.01% recently joined with Coach Inc. COH, -0.97% , the clothing and accessories brand, on a collection that includes a $250 wristlet with oversize Mickey Mouse ears, a $1,995 leather motorcycle jacket with a studded Mickey Mouse silhouette on the back, and $245 Mickey Mouse sneakers.
Coach has sold out of the $1,500 Mickey beanbag chair, the $200 leather Mickey book cover, and the black leather Mickey Mouse doll, according to the Coach website. The doll comes in three sizes, the priciest of which is $1,500. The Disney x Coach line launched online and in stores June 17.
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“I’ve always seen Mickey as a playful rebel at heart and a timeless symbol of joy and creativity,” said Coach’s creative director Stuart Vevers in a statement. “That spirit reinforces the new youthful perspective we are bringing to luxury at Coach.”
The new brand approach is one that could help Coach stand apart in a crowded luxury handbag space.
“Coach is tired of being an almost-luxury brand, tired of pricing itself below where luxury European brands are priced,” said Rowe. He believes this is a partnership that puts Coach in a “place that it can own.”
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“They’re celebrating their 75th anniversary, and partnering with Disney really helps set Coach apart,” he said. “It takes a deep dive into, ‘We’re going to be playful, youthful and proudly stand as an American brand.’”
So far, the collaboration seems to be paying off. Piper Jaffray reported on channel checks analysts conducted in a June 21 note that reaffirmed its overweight rating. They say conversations with in-store and online representatives were “positive” and “the Mickey launch is besting expectations.” The collection is also (literally) well-liked on social media.
“[W]e believe the Disney x Coach collaboration can move the needle from a comp perspective,” Piper Jaffray wrote.
The bank has a Coach price target of $47.
At first blush, the Disney x Coach collaboration would seem odd given what’s happening in the luxury space. Companies like Michael Kors Holdings Ltd. KORS, -1.73% and Ralph Lauren Corp. RL, -1.24% have taken steps to protect their identities by refocusing on their core brands to enhance their high-end status. It seems like Coach is going more mainstream to plant its flag on an unoccupied patch of the luxury landscape.
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“It’s interesting because they’re taking a mass appeal thing with high-end product,” said Rowe.
Romney Jacob, North American director of mind-set at WGSN, a trend forecasting and analytics firm, believes this is a new take on brand collaborations.
“This is actually not a move to make the brand more mass,” said Jacob. “This is the new high-low collaboration. Five to 10 years ago, it was about luxury designers doing capsule collections for fast-fashion stores. What we see replacing that high-low excitement is luxury brands embracing youth culture.”
And it’s not just Coach that’s undergoing a brand transformation. Disney has also changed over the years.
“Disney is one of the most-loved brands in the world,” said Jacob. “That’s not new, but what is new is that it’s no longer associated strictly with childhood. It’s a brand for adults to love too.”
The attachment that consumers of all ages feel for Disney is something that Coach – and many other brands – can draw upon.
“A Coach and Disney partnership is about leveraging the power of two well-known brands to create a differentiated product,” said Jared Wiesel, partner at Revenue Analytics. “If executed correctly, this unique offering should be relatively insulated from direct competitive threats and create a reason for new and existing customers to engage with the Coach brand.”
Finding those pockets of exclusivity is important, even for a brand that excites as much passion as Disney.
“At this stage (after the height of the Star Wars licensing mania), Disney could probably collaborate with any brand they wanted,” said Jacob. “It’s important that they don’t oversaturate the market and choose their collaborations wisely. The most successful partnerships will be with brands that evoke the same sentiments as Disney. Coach is a great choice because both are quintessential American brands.”