From Public Servant to Fashion CEO: Learning to Lead on the Job with Lew Frankfort

[1:20]Zibby Owens: This is Zibby Owens and you're listening to Totally Booked with Zibby. Formerly, moms don't have time to read books. In my daily show, I interview today's latest best selling, buzziest, or underrated authors and story creators whose work I think is worth your time. As a bookstore owner, publisher, author, and obviously podcaster, I get a comprehensive look at everything that's coming out and spend my time curating the best books so you don't have to. Stay in the know, get insider insights, and connect with guests like I do every single day. For more information, go to zibbymedia.com and follow me on Instagram zibby owens. Lou Frankfurt is the author of Bagman, the story behind the improbable rise of coach. This episode was recorded live at the Zibby's Bookshop pop up at Minnie Rose in New York City. Lou Frankfurt is chairman emeritus of Coach Inc. He joined Coach in 1979 and served as chairman and CEO from 1985 through 2014. During his thirty five years with Coach, Lou built the small leather goods company into a $5,000,000,000 global accessories and lifestyle brand and was recognized multiple times by Barron's as one of the 30 most respected CEOs around the world and by institutional investor as one of the best CEOs in America. After retiring from Coach, Lou co founded Benvolio Group, an investment firm that focuses on early stage disruptive consumer brands, including several where he advises and mentors senior leaders. Lou spent the first ten years of his career in New York City government, with the last three restoring the city's Head Start and daycare programs as the commissioner of the Agency for Child Development. He grew up in The Bronx and attended Hunter College and Columbia Business School. He and his wife, Bobby, live in New York City where they are active supporters of education and the arts. They have three children, eight grandchildren, and two beloved Labradoodles. And if I sound particularly excited during this episode, two seconds before filming it, I found out that one of my twins had just gotten accepted early into college. Meanwhile, Lou was waiting to hear from his granddaughter if she was getting accepted into college too. So it was a very positive, fun experience. Thank goodness. Anyway, moving on. Everybody, thank you so much for coming today to talk we're gonna talk to Lou Frankfurt, Bagman, the story behind the improbable rise of coach. Thank you so much to the whole team at Mini Rose for welcoming us in your space per usual. It is always such a pleasure to be here in our collab with Cities Bookshop. So yay. And we're just so excited to have you. Thank you. Yay. Okay, Lou. Why did you decide to write this book?

[4:02]Lew Frankfort: It was actually at the urgings of my children who thought that I should tell an authentic story. And it's less about my journey as coach or my management skills, more about how that coupled with my essence, my values, and mental health, how that whole thing came together to enable me to be successful at Coach. And part of their motivation was that Gen z and millennials could use an authentic story where people show leaders show vulnerability, show empathy, and are not just masters of the universe like many very successful people are with they are domain experts on subjects where they're not qualified to hold an opinion. So I decided that I would embark upon a journey that would really talk to coach as the main subject, but with values and my own personal journey that others might be able to glean an insight from or that could be helpful in their own life's journey, whether it's business, college, entrepreneurialism.

[5:27]Zibby Owens: Amazing. You have a philosophy that you said you really honed when you did your pitch to the team in Tokyo, which is magic plus logic. Talk a little bit about how that became your guiding principle for Coach and how the rest of us can use it. When we were contemplating going into, Japan in 1988,

[5:47]Lew Frankfort: the only, significant brands in Japan were European luxury brands. Japan did not have a history of local, brands. World War two, really disrupted everything for Japan. And post World War two, the European luxury brands led by Louis Vuitton, followed by Prada, and Gucci, entered the market and as became very dominant as as a way for successful Japanese men and women to express themselves through by, borrowing the identity of bags to say who they are. And I, always saw Coach as a democratized luxury brand, an alternative to European luxury brands. In his our situation in America is we have no indigenous. No indigenous or American luxury brands. We're a country of immigrants, whether we came on a Mayflower or we came five years ago. And from my early days, I thought that if we could take the best of America, grit, hard work, and translate that into the values of a product and translate that through storytelling and service levels into what people might aspire to in the American dream that we could build a successful business. So I needed to find a way to translate that into a presentation that nonspeaking a nonspeaking chairman and CEO would understand. And what I decided to do was to talk about a blend of magic and logic on the magic of America and New York, vital and rich and successful. Everyone thinks about New York as the center of the universe. People still do. And regardless of what they may think about American politics at any particular time, they separate New York, the energy, the drive. Everyone knows someone who is living the American dream in The United States from all around the world. So I developed a presentation that talked about product. It talked about consumer. It talked about Americans, and I entitled it magic and logic. And the reason I entitled it magic and logic is that we really built our story through a blend of logic, rigor, analytics, a belief that in collaboration, but also magic in terms of having a vision, imagination, curiosity. All of those elements together was how we got to coach in 1988. So we never got past the cover. The CEO of Mitsukoshi, a leading department store that was founded, believe it or not, in 1664 or thereabouts. And only a few years before I visited the first time, did they not require people to leave their shoes at the door and give them slippers when they went through the store. Everything was white glove. It was a perfect economy in the nineteen seventies and eighties. So we never got past the cover. He loved the concept of magic and logic, and he felt that was America because it took people from all around the world, and somehow it worked. Now you need to also appreciate that Japan does have limited immigration, and it is, largely a singular society with, of course, multiclasses. So, that was how we got started. And he believed in the American dream. He believed in New York, and he was prepared to make a big commitment. And that's how we insinuated ourselves into the Japanese market.

[10:02]Zibby Owens: Amazing. Long story. No. It's great. We should abbreviate it. No. No. It's perfect. One of the things that you have many leadership things that you talk about in the book that I was so impressed by, one of which is getting customer feedback all the time. It used to be that you had, in the very beginning registration cards for every bag and you had all this data and you could reach out to people. That's how you started your catalog business. And you could ask customers what they thought. You were relentless in your pursuit of information and figuring out who the consumer is. What did they need? What did the bag make them feel? And all of the behavior and thoughts and feelings behind the bag. Talk a little bit about that and how important that is in any sort of retail decision.

[10:44]Lew Frankfort: So the secret that I share in my book is that I knew nothing about brands. I knew nothing about fashion.

[10:54]Zibby Owens: I was trying to make it sound like you knew everything. Go with it.

[10:58]Lew Frankfort: But I did know on how to be of service because I had spent ten years in city government And in my most senior role, I was responsible for New York City's day care and head start programs. And at a time when the city was in its went through bankruptcy in nineteen seventy six, seventy five, seventy six. And I was responsible for service servicing underprivileged families and children. And I was committed almost messianically to ensure that every eligible child would remain in service. The head start was not run well, federally funded. Day care was not run much better, state and local funding. And it became the poster child for why government is excessive and should cut back. And I accepted the position because I I cared greatly, and I thought that I would do what was necessary, never leaving the client alone. That's a long way to say when I got to coach, I was very curious about customers because they were the people I was gonna serve. And long before I accepted the position, I pretended to be a Businessweek reporter. Mhmm. And I spoke to merchants and buyers at Bloomingdale's, Bonwit Taylor, Macy's, and I went into a small specialty store on the Upper West Side, Handbag Specialty Store on 72nd Street between West End and Broadway saying, I am a freelance reporter for Businessweek. I wanna know about Coach. It was a small business, $6,000,000 in sales. And what I learned from everyone was that people love their bag. And when I went into the specialty store, the owner who had only one bag in stock, which was not out because it was reserved, said to me, Lou, it has a cult following. You need you won't believe it. But people really love their coach. So coming from the sixties and, being a product of the sixties, I was intrigued. So from the very first day in coach, I was maniacally focused on who our consumers were, who they weren't, what were their interests, how did they think about making a handbag purchase. And over the following several years, I started to go into women's closets and look at their bags to understand the brands that they carry, what role did Coach play. And out of that, we learned who our consumer was. We also learned over time about her values and her preferences. And what we were able to do, because we developed baseline statistics, was to measure changes in her values and her interests. And so we looked at past indicators, concurrent indicators, and future indicators to really understand

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[16:56]Zibby Owens: So another innovative thing that you did that people might not even know is that there didn't used to be freestanding stores that just sold one brand. So the idea that you opened a Coach store right by Bloomingdale's, went in and talked to the head of Bloomingdale's and said you were going to do this thing that everybody thought would be in, you know, that it would enrage the Bloomingdale's people because you were going elsewhere and you said, no, I'm actually going to bring you more sales. You started this concept, and now it's like everybody does it. Talk a little bit about that. My general view being consumer centric

[17:33]Lew Frankfort: was that I wanted to make Coach available in image enhancing ways wherever consumers chose to shop. It was clear to me when I joined Coach, when we were only a wholesale business, there was a growing mail order opportunity. If we were able to sell products directly to consumers, that we would get to know them better because we could communicate with them. We could also present our products in a carefully merchandised way, the catalogs. We started a mail order business in 1980. I joined in 1979. And I also studied European luxury brands. And the brand that I admired the most at the time was a small French brand by the name of Louis Vuitton. They had a handful of stores around the world, but they didn't sell to anyone else. They only sold through their stores. And the idea that we could build a store, have our trained staff there, and people could have an immersive experience with all these strength in the brand. We decided we would open a store, and the founder agreed with me that we could do that big debate on the location. I won out. He wanted to open across from Carnegie Hall between a chicken store and an umbrella store because we used to advertise in Playbill And and all of the theaters and Carnegie Hall, you would always see these coach block ads. But his wife voted with me, Lillian, and it changed our destiny. Along the way, I was asked by a colleague who ran a wholesale business if I could go back to city government and and before we go with the sword. And I, of course, knew why, but I thought I would ask him. And he said, Miles is really fickle. When this when we're thrown out of Bloomingdale's and the store fails, he's gonna walk me. He doesn't wanna deal. He won't wanna see you anymore. And and he said, guess what? We also need to see Marvin Traub, who is was the godfather of departments. So some of you are nodding. May he rest in peace. He was the champion in that area, and I went to see him. I went into this conference room behind the betting department, and there was this whole section executive wing. And in the room were these big portraits of older, excuse the term, white men dressed in suits. All they were all the leaders of before Marvin Traub came in, and there were many staff waiting for Marvin. I came with this one person. And before I he came into the conference room, he said to I was told he wanted to speak to me outside. So I I went outside, and and he said to me, Lou, I'm going to lambast you in this meeting and tell you that it's the worst partner activity you can do. But between the two of us, I think it's the smartest thing you can do for the future because consumers are really expressing themselves towards channels of preference, but you cannot tell anyone. And I actually did not tell Dick, and I never told Miles. And I subsequently, of course, spoke to Marvin about it, who tracked my coach's success, and I give him a nod in the book and of appreciation for being open minded and a futurist.

[21:28]Zibby Owens: So we have some lies. We have impersonation. I don't know. Lou, you're really putting it all on the table here. But you also share with us in the book some of the hardest times. You share the loss of your colleague Arun who was one of the first people you worked with. You were on the phone with him or in meetings with him constantly, you were super close to his family who you moved from where they lived to be closer to coach. Then at age 39, he passed away from sudden cardiac arrest. And you can I could feel this the loss and the grief as if it was new when you wrote about it in here? You can tell how much pain that brought you. Can you talk a little bit about that? Sure.

[22:07]Lew Frankfort: In 1985, Miles and I, at Miles' decision of course, sold the business and I played a role in helping him find the company that we would work with and that was Sara Lee Corporation. I introduced a coach to Sara Lee, and I thought they were the best partner for us because they were in Chicago, and we were in New York. So I would have some degrees of physical separation. It was long before the Internet. And second, they were a holding company with very strong financial disciplines, and I thought I could learn from them how to scale a business. At the time, the Sara Lee Corporation was $20,000,000,000 in sales, and this goes back now forty five years. So that would be, like, $80,000,000,000 in sales today. The conglomerates were very popular in the seventies and eighties. And from Sara Lee, I recruited one person to begin with, and that was my chief financial officer. And he wasn't the person they recommended. I went through their recommendations and asked for someone who was not from Winston Salem, someone who was more entrepreneurial, who might not already be a CFO, but really had the bandwidth to become one. And I met this young man, Arun Rao, who had come from India about twelve years earlier, got a master's degree at Wake Forest, and was rising through Sara Lee. We hit it off immediately, and, he joined joined us. And and a few months after he joined us, we move we Arun and I helped I helped Arun identify a home near my home in New Jersey where he and his wife who comes from Winston Salem, a Baptist family, could move to, New Jersey. And he and I and our families, including Olana, became very close friends, and he was like a much younger brother to me, and we were family. And he died very unexpectedly and also pleased to say we're very close with their family through today. I walked his two daughters down the aisle. And when the book was finalized well before it was published, I did a Zoom call with his widow, Nadine, and his two adult daughters where we read the passages that I described in the book, and there wasn't a dry eye on that call, me.

[24:56]Zibby Owens: My gosh. It was so beautiful. Well, you honored his memory in such an amazing way and now we all get to know him and his his brilliance and kindness and all the rest. So thank you. And you you also you talk openly throughout the book about your feelings, not just about loss, but anxiety, your nightmares, your fears about losing your house. Later, you even talk about your bodywork guy who now I need to get Edgar's number honestly. I'm like, who is this guy? But you talk about coping strategies and how stress finds its place in the body and how you've coped with it in ways good and bad. Can you can you share that with us?

[25:32]Lew Frankfort: Sure. Our bodies don't lie to us, and I've always been driven by a drive for excellence and a fear of failure. And through last night, I have failure dreams. They don't we could be shocked. I'm shocked. My psychiatrist says it's in your DNA. It will never go away. It will take different forms. So the a failure dream is where something's important to you, and it's something and, again, Sigmund Freud, if you read the primer of dreams, talks a lot about failure dreams. And it's our unconscious talking to us about our insecurities, and and it'll and we it allows us to manifest while we're sleeping the things that give us anxiety. When that happens, it often turns into body stress. It might be harder to sleep. You might wanna just stay under the covers and lose your mojo. Your back might hurt. There's a 100 different ways it can manifest. And by the early nineteen nineties, I was very conscious that I needed to find more balance in my life, and there were things I could do to relieve my stress. And if I was feeling overwhelmed, there were things I could do about it, and it became part of my regimen. I saw Edgar just today Oh my gosh. In my offices. Edgar is a massage therapist who I met when forty years ago when Alana was a toddler. And, he's gifted. He believes in energy flow. And I've been given advice to my teams, even at Coach, but certainly, subsequently, both to in the companies where I play a leadership role and to the next generation and the third generation, whether it's Gen z or millennials. If they're in some form of in between state applying for the college not getting into the college they might want or having trouble finding a job or wanting career advice. And I meet many people who are close to my age, who are retiring from a career and want advice. And I say, you need to plan. You cannot go from a 100 miles an hour to I'm gonna lie on the beach or go travel around the world. If you're a twenty four seven person, you really need to develop rituals and routines to help you

[28:25]Zibby Owens: through that process. I know the beach sounds pretty nice today. I'm thinking. You overcome so much in the book. You start out overcoming difficulties speaking and the detail how that affected you sort of psychologically in school and all of that. You overcome downturns in the market, you overturn when Dooney and Burke for example was catching up to you, you overcome sales dips and have continued to recreate the brand that's been around for so long into something amazing. How do you keep brands continually innovating? How did you what lessons did you learn from Coach that we that other brands can can learn from you? First,

[29:08]Lew Frankfort: I do believe building brands is a blend of magic and logic. And this while there's logic and magic and magic and logic, You need to if you're thinking about building a brand or you are responsible for a brand, you need to have belief in possibilities, and that's magic. You have to believe in something that doesn't exist, and that there is a and that there is a clear void need or you can identify from a consumer trend perspective that there would be acceptance. You need also need to have courage and that's on the magic side. And immersive curiosity is a constant, very fundamental. You also need to build a culture that recognizes the greater good of the total enterprise and build a team that has a belief in the journey and find a way to help them participate in the journey through through learning, development, career opportunities, pushing success down the through not only through executives, but even through today, Coach gives stock equity awards to every store manager across the world. We went when we went public, we were the first brand I'm told that did this in significant ways. For me, it was only my democratized roots wanting everyone to benefit from the greater good. But building a brand requires you to be constantly on guard. You can never be complacent. When you're most successful is the time when you need to run scared. And rather than step back and say, well, we beat plan. We're killing it. You need to always be listening to your consumers, understanding who they are. You need to look at your competitive framework. You need to have the right leadership team that can complement you, share your values, and build a culture that's affirmative, that's optimistic, where people want to come to work. I tell people through today that if you want to really make a difference, do the very best you can in any job, even if it's not your destiny. And if you pursue something, you will learn a lot from that. Do your very best. And somehow, sometimes it also helps you find your best destiny.

[31:55]Zibby Owens: Is there a brand today that you think is doing a great job?

[31:58]Lew Frankfort: Coach. Oh. And I would not have said that five years ago. Coach is going through an incredible renaissance in its ninth decade, and I'm thrilled to say that the market cap of the company is higher than it was for ten years to get back to where it was when it peaked, when I was there when it peaked. And the sales are higher than it ever was. And Coach is a true legacy brand. It will be here in the decades to come. Legacy brands are those few brands that are in the hearts of minds of consumers over generations. And they have really focused really wisely on Gen z. And to do that, they went back to the past to go to the future. And if you look at our best selling silhouettes today, they are modern versions of the natural leather grain product that we had in the sixties and seventies and eighties. There's a very big belief in our team at Coach and sustainability, recycling products. We support customization, vintage. And we and we believe that Gen z is very reminiscent of my generation from the sixties. They question authority. They're not they don't accept anything, take things for granted. They know the world is really messed up, and they wanna live their lives. And many of them wanna help the world become better. Well, as I as I told you on our Zoom yesterday,

[33:43]Zibby Owens: my parents gave my 12 year old daughter a Coach bag, and she was, like, over the moon excited. So this brand is not going anywhere if she's any indication.

[33:52]Lew Frankfort: But, you know, there are, of course, many great American brands and that are, in my mind, legacy brands today, and they, of course, include Nike. They do include Ralph Lauren.

[34:05]Zibby Owens: Amazing. Just before we open it up to questions, you write a lot about the sense of family. You say that you treat your team at work like a family, that you prioritize your own family. You write so lovingly about your wife, about your mom. What is the role of family for you? It's integral

[34:24]Lew Frankfort: to who I am. So when I think about life's journey, I think about two things. One is purpose, and the other is relationships, authentic relationships. And when we talk family, it's not only biological family. We have family that are beloved friends, and they are family. And I most of my friends are the same friends that I had thirty and forty years ago. And I was asked not too long ago, I think when I was in Toronto speaking at the university, how have my values changed? And they haven't. I feel I'm fundamentally the same person I was forty,

[35:08]Zibby Owens: fifty years ago. Well, for someone who started out struggling to find a voice, I feel like you have honed your voice and shared it with the rest of us in such a beautiful way. So thank you so much. You're very kind with your comments. My pleasure. Thank you for listening to Totally Booked with Zibby, formerly moms don't have time to read books. If you loved the show, tell a friend, leave a review, follow me on Instagram at Zibby Owens, and spread the word. Thanks so much. Oh, and buy the books.