In this edition of Author Talks, McKinsey Global Publishing’s Seth Stevenson chats with Lew Frankfort, chairman emeritus of Coach, about his new book, Bag Man: The Story Behind the Improbable Rise of Coach (Harvard Business Review Press, October 2025). Frankfort’s memoir details the decisions he made and challenges he overcame as Coach grew from a small family business into a multibillion-dollar global brand. He details his strategies for identifying underserved consumer niches, offers advice on how to lead a company, and shares his approach to overcoming his struggles with anxiety. An edited version of the conversation follows.
Why is your winning formula ‘magic plus logic’?
At Coach, I coined the term “magic and logic.” The term is not unique to Coach, of course. It aligns with art and science. What led me to coin that term was a meeting I had scheduled in the late 1980s with the chairman of a Japanese department store, Mitsukoshi, to explain why he should embrace our young New York–based brand and introduce Coach to Japan.
I wanted him to understand that we had a 360-degree view of the business. We focused on the product, consumer, brand, and marketplace. I said: There’s a lot of logic and rigor that goes into the business. We look at metrics. We look at trends. We look at the size of the markets. But we also seek to understand how consumers are feeling and what prompts them to buy a bag or an accessory. Why buy a Coach bag and not another bag? What do we need to do to bring the best product to market at the very best possible price?
We barely got past the headline of the presentation, which was translated into Japanese, because the chairman and CEO said, “Lew, we need magic. And we need creativity. And it’s a blend of both.” That became a way of life at Coach.
You can’t rely entirely on logic when you’re building something that has emotional attributes to it. You need to get into the hearts and minds of the consumers you’re targeting. It’s challenging to keep the right blend of magic and logic. Sometimes it flows smoothly. Other times, we could overindex on magic or overindex on logic. There are many keys that we need to look at.
One is performance metrics. Second is consumer attitudes. Third is overall trends in a category and in the industry, and social and psychological trends that influence buying behavior. An example of where we overindexed toward logic was in 1995 and 1996, while our business was growing. We realized we had some leading indicators that signaled we would hit a wall soon with new consumers.
You can’t rely entirely on logic when you’re building something that has emotional attributes to it. You need to get into the hearts and minds of the consumers you’re targeting.
That particular index tied to a five-point scale where we measured future purchase intent among consumers. Typically, we would be in the high ’80s, low ’90s, which is remarkable. And we were very proud of that. Over a few months, we slipped to 75 and 80.
We interviewed thousands of consumers, not just a handful. It was a quantitative survey that we did every three months, with at least 5,000 consumers in the US, 5,000 in Japan later on, and so forth. The reality was that younger consumers were looking for more stylish products.
That occurred for multiple reasons. One, the European luxury brands, which had a very low presence in the United States in the ’80s and ’90s, decided that it was a new frontier. They opened beautiful stores in the United States.
Also, mass brands, such as Nine West, copied the fashionable styles of the European brands and offered them at a fraction of the price. Suddenly, we were faced with a young consumer who had many more choices.
What we needed to do was amp up the “magic” in our product. We needed to add magic in our storytelling. We needed to amplify the magic in our environments so that we could better address the needs of the younger consumer who would be coming into the franchise.
How did Coach pioneer the accessible luxury segment?
It starts with an understanding of the marketplace. When I joined Coach in 1979, very few European luxury brands had a presence in the United States, except in a handful of major cities. The market was basically not that compelling for handbag users, except for the top 1 or 2 percent who might buy European luxury brands.
The reality was that there were mass brands that dominated the market, such as Anne Klein, Nine West, and many others, and that America never had indigenous luxury brands. If you go back to 1980, we had a burgeoning middle class. Our economy was robust. The children of the people who had served in World War II were going to college. They were moving to the suburbs. They were becoming professionals. They were beginning to travel. And what was clear to us when we went public in the year 2000 was that our positioning, which was between mass and luxury—even though the luxury competition was very small—was a lane that we could grow.
In my conference room, we coined the term “accessible luxury” for Wall Street investors. And it’s now part of the global lexicon. It was easy for us to put some language and words around that. So when we talk about accessible luxury, we’re talking about a great product that is an excellent value for the money. We’re also talking about convenience, because it is available in image-enhancing ways where consumers shop. We developed a blend of magic and logic to create an image-enhancing environment with great storytelling, offering compelling products, and providing excellent aftercare service so that we would develop an ever-increasing loyal base of consumers.
In my conference room, we coined the term “accessible luxury” for Wall Street investors. And it’s now part of the global lexicon.
How did Coach transition from a family business to being part of a conglomerate to going public?
When I joined Coach, it was a small family business. The environment was safe and paternalistic. That was the plus. The minus was that everyone had to stay in their own lane because we had a single decision-maker, the founder. So the challenge was for me to innovate and, at the same time, get his buy-in. This created challenges because I wasn’t staying in my lane. I was looking to open Coach in different channels, and there was someone in the lane who controlled revenue for wholesale.
There was always a negotiation. That was my first experience, until I went to the exact opposite of a small, paternalistic family-run business. I went to a large conglomerate called Sara Lee Corporation. I helped find and negotiate, along with a banker from L.F. Rothschild, the deal for the business to be purchased.
We became part of a $20 billion conglomerate that was very stylish at the time. The idea was to have a roll-up of individual brands—have a holding company that would be wise and thoughtful, that would be global in nature. Sara Lee was that company. And I welcomed an owner that would be based in a different city, Chicago.
I also liked that Sara Lee was very performance driven. They had clear metrics. There was a high level of accountability. They encouraged me to grow the business in multiple channels, and I had a great deal of autonomy. I had monthly reports, which we sent to Sara Lee, and quarterly business reviews. As long as we met or exceeded the numbers, we were left alone.
We joined Sara Lee when our sales were $25 million. Sara Lee was a perfect parent while we were small. But as the business grew and became more complex and international, I found myself running up against the guardrails set for individual portfolio companies, guardrails in terms of organizational structure, compensation, and more. Yet I sought to make Coach the best possible version of itself and needed to recruit individuals at higher compensation or with different scopes of responsibility.
I welcomed Coach becoming a public company for a variety of reasons:
- Access. Perhaps most importantly, we would have access to unlimited capital.
- Recruitment. I would be able to recruit and keep the very best people because I would not be tethered to compensation schedules that exist in larger conglomerates.
- Domain expertise. I would be able to bring in a group of advisers who were domain experts, who could help me grow, help my team accelerate their growth, and help keep us honest.
The minus [to going public], of course, is increased pressure. You have increased pressure because you have to deliver numbers every three months. What we developed at Coach before we went public was a mantra. The mantra was that we were going to run a marathon. The marathon would be 26 quarters, or six and a half years. And each quarter would be equal to one lap. What was critical with each lap was that we wouldn’t run out of energy, that we would be able to do the second lap at the same speed, and perhaps a little better, so that we could meet street estimates.
We approached each quarter as part of a marathon where we had a clear road map, vision, long-term goals, and hurdles that we would need to meet. Around 2005, when we approached or passed our 20th lap, someone reminded me that we were about to complete the marathon. And I said, “We’re going to continue running and turn it into a 50-mile race, not a 26-mile race.” And that was our philosophy.
What was your approach when assembling a board of directors?
When I had the opportunity to build a board of directors, I was fortunate. I had the experience of watching and even being on certain boards that were not high-performing boards. The boards tended to be cheerleaders for the CEO and the chairman, and I wanted to do it differently. From my experience of seeing dysfunctional boards that were only cheerleaders for the CEO and the chairman, I decided that I wanted a board that my team and I would respect and consider value added.
I wanted to build a high-performance board that was similar to a high-performance team. To do that, you need to secure the best possible people. They need to understand your business. In the case of a business like Coach, they need to understand magic and logic. They must also have expertise in a specific area, and their values must align with the company values.
During our golden decade, I was fortunate to achieve a diverse group of board members who were highly respected by my team, deemed valuable collaborators, and who created a collegial environment.
I tell leaders that they need to be open. I tell leaders: Don’t be afraid of being challenged. I know you think you’re going to lose control. I know you think you have the best ideas in the world. And I know they’re very well thought out. However, you need to be open to antithetical views simultaneously, and look at them, and take them apart. You must be able to hold two antithetical views in your mind, or even three, at the same time, and see the merit of each.
If you’re not willing to do this, you will never become the best version of yourself, and your brand will never realize its potential. That requires having the best leadership team around—leaders who have the courage to push back and speak truth to power—and an independent board of directors who will say, “Lew, you’re wrong. We’re just not there.”
How can leaders channel fear of failure in positive ways?
I’m skeptical of any leader I meet who says, “I’m not afraid.” I had failure dreams just last night. But anyone who is the least bit honest with themselves has some level of fear.
From the very beginning, I was driven by excellence and fear of failure. So I was never complacent. Even when we achieved things, I said, “Great, but this is a new plateau, and we have to climb to the next one.”
It gave me a sense of relentlessness about never accepting where we were. I believe the drive for excellence and the fear of failure led me to smell everything that could injure and stop us. I tell people all the time—even if they’re meeting or beating their numbers and growing market share—don’t take it for granted. Run scared because anything can happen at any time.
I’m skeptical of any leader I meet who says, “I’m not afraid.” I had failure dreams just last night.
There are three conventional ways to respond to fear. While this is human nature, it’s the same for most mammals, not just humans. You can fight, you can freeze, or you can run:
- Fight. This is where I am when it comes to business. And when you have fear, you need to recognize that your fighting spirit could also bring you down at certain times.
- Freeze. You need to find ways to cope so you don’t freeze. Over the years, I became increasingly aware of a need to decompress, a need to find ways to detach, whether through power naps, meditation, exercise, or other compelling interests, so that I would be able to come back and fight. I also recommend getting help from others, whether through executive coaching or therapy, to help unpack things that you’re not able to release.
- Run. You need opportunities to decompress and approach work with a fresh perspective. You don’t necessarily need to go on leave for three months.
What’s your advice to someone launching a consumer brand today?
When I advise entrepreneurs who are in the early stages of contemplating a business or starting a business, the most important thing I say to them is, “Great ideas don’t necessarily turn into great businesses.”
I might go further and say, “Only 5 percent of ideas or businesses turn out to be profitable.” The second thing I say is, “Know your customer and know your market. And understand the barriers to entry. Understand if the market is mature or growing.”
Understand whether you have a distinctive product or service that you can successfully insert into the market. And most important, have a clear path to profitability. If you don’t, it’s very rare that we would ever contemplate investing.
Last, be open to wise counsel. I’ve made the mistake of being attracted to brilliant, creative people who had ideas that I could only imagine, that I’d never build myself. And I did not lean in enough on their values or on their ability to grow. I often say, “Stay away from hard-wired narcissists who are first-time CEOs.”
