Last year Coach, Inc. went through a rebranding effort which resulted in a new company name: Tapestry, Inc., to include a conglomerate of brands:
- Stuart Weitzman
- Kate Spade
With that, on Tuesday, Tapestry, Inc. reported their third-quarter earnings and revealed some struggles.
Store sales were down by 9 percent for the brand.
The company blames the intentional pullback from both wholesale and flash sales, as well as a decline in global e-commerce.
The reason for the pullback is all part of a strategy similar to the one executed at Coach.
The hope is to remedy any brand dilution and regain its prestige.
In addition to that, in November, Deborah Lloyd, their creative director, left the company and was replaced by Nicola Glass.
And in March, Tapestry brought on Anna Bakst as Kate Spades CEO.
According to a statement from Tapestry CEO Victor Luis, there have been “execution issues including production delays and lower sell-through of key carryover styles, which pressured sales and margins.”
But on a lighter note, in February, Stuart Weitzman made its New York Fashion Week debut with their new creative director, Giovanni Morelli.
And just last month, the brand brought on Eraldo Poletto, from Ferragamo as their new CEO.
With that, the various changes seem to have made investors nervous, allowing Tapestry shares to plummet about 13 percent Tuesday morning, according to Bloomberg.
Sales increased by 3 percent for the brand.
And Luis has continuously praised the Coach collaborator and model Selena Gomez, whose collection will expand for fall and will include ready-to-wear.
Tapestry’s net sales rose 33 percent, largely thanks to the Kate Spade acquisition.
Tapestry also expects fiscal 2018 revenue to increase about 30 percent, with Kate Spade adding more than $1.2 billion in sales.
In his statement, Luis touches on his team’s priorities and future plans:
“At Kate Spade, while our near-term priority remains integration and executing the strategic initiatives in place, we look forward to fueling growth in the years ahead through Nicola’s fresh, new creative direction and Anna’s extensive category experience.”
Luis also notes:
“Similarly, we believe in Stuart Weitzman’s potential, as we evolve the product assortment, infusing it with Giovanni’s modern design aesthetic while strengthening the brand’s infrastructure under Eraldo’s leadership.”