Tapestry scraps Kate Spade store openings after moderate growth
15/08/2019
Its biggest brand, handbag company Coach, reported a 2% rise in sales to $4.27 billion.
“We understand that driving sustainable growth at Coach is essential to the success of Tapestry overall and are proud of the brand’s performance,” said Tapestry CEO Victor Luis.
However, despite a 6% rise in sales at Kate Spade, the board was disappointed and has ruled out further acquisitions, preferring to grow organically.
“We made important advancements at Stuart Weitzman, across people, processes and product to address the challenges in the business, driving a return to topline growth in Fiscal 2019. We’ve also successfully expanded the brand internationally through regional distributor acquisitions and new store openings, with a focus on China, where we are just beginning to tap into this tremendous growth opportunity for the brand.
“At Kate Spade, the most significant milestone of the year was the debut of Nicola Glass’s creative vision, reimagining the brand while staying true to its unique positioning, heritage and DNA. We are incredibly confident in this vision, supported by the emerging positive signs we are seeing.
“That said, the brand’s financial results did not meet our expectations and more time is required to drive a positive inflection in the business, particularly in light of the traffic-challenged and competitive retail environment in North America. We acknowledge that there are opportunities to improve performance and we are addressing those areas with a sense of urgency.”
He added that the group has revised its outlook for Kate Spade, and has pulled a number of planned store openings.
Kate Spade sales reached $1.37 billion, and Stuart Weitzman revenues hit $389 million, an increase of 4%.
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