Tapestry Announcement Of Personnel Changes

The US luxury light group Tapestry Inc. suddenly announced on Monday that its Joshua Coach, the president and chief executive of its brand, is leaving. He joined Coach in June 2017 and has not been in office for three years. In the announcement of personnel changes, Tapestry said that before finding the next candidate, the group president and CEO Jide Zeitlin will be responsible for Coach products, markets and strategies. He said: "now is not the time for companies to make big changes, but I am glad to see that the three brands have consistency and have strong momentum of development." In addition, Jlide Zeitlin will continue to serve as chairman and CEO of the group in the next three years.

Such abrupt changes took place in September last year. When Tapestry Luis CEO Victor Luis suddenly left, the Group Chairman Jide Zeitlin was appointed the new CEO of the group. Zeitlin later revealed that the Luis department was fired because it failed to realize the price of the brand.

In recent years, the group has been committed to the overall transformation. Coach group has acquired Stuart Weitzman and Kate Spade in succession, and has been renamed Tapestry group. At the same time, he invited Joshua Schulman, a luxury retailer with rich experience, to join Coach. He raised the price of products, expanded the global stores to the younger generation of products, and saved a brand that once existed in the eyes of consumers as "hypermarket style".

Yang Baoyan, President and chief executive officer of Coach China, told an interview with the Economic Observer last year: "acquiring multi brands will enable us to make better use of talents and allocate more resources to share with Yann". (Bozec) But the challenge of multi brands is to make each brand as an independent business with distinct positioning and brand strategies.

Tapestry Susan Kropf, the chief independent director of the board of directors, also expressed her views on multi brand collectivization after her last CEO Luis left office. In view of the sustained growth and development momentum of Coach, its primary task is to promote the growth of two other brands. In other words, at present, more Kate Spade and Stuart Weitzman rely on stable growth of Coach to support their climb rather than mutual supply relationship.

According to the latest 2020 fiscal year second quarter earnings report released by Tapestry, the group's net profit rose 16.9% to 299 million dollars over the same period, slightly higher than analysts had expected. Coach is still the main driving force for the growth of the group's performance. Its net sales increased by 2% to 1 billion 270 million US dollars, and its gross margin was 69.1%.

Under such a premise, the task of Coach is even more arduous. The brand is highly dependent on the North American market. 61% of its $4 billion revenue last year came from North America. But the risk exposure of Coach in the US market is expanding. The golden age of us department stores no longer, the rise of the electronic commerce platform, and the rise of more small brands in the United States have laid a hidden danger for brand sales. The hollowing of the middle class in the United States has also promoted the emergence of a highly polarized market. The parity products and luxury goods are separated from each other, while the road to light luxury brands is getting narrower.

In the tenure of Joshua Schulman, Coach's attitude towards the Chinese market is far less enthusiastic than other brands. Although Zeitlin has always stressed that "China is irreplaceable", Tapestry2019's annual report shows that sales in the Greater China region account for only 15% of its total revenue. Therefore, the group emphasized in the earnings report that it would shift more focus to the Chinese market in the future and excavate the consumption habits and interests of Chinese consumers. These efforts were enough to be seen in last year's Expo and Coach Shanghai autumn and winter show.

Although sales in the Chinese market grew strongly in the latest quarterly earnings report, they even offset the weak sales in Hongkong and Japan. But China's young consumers are less than Coach Michael Kors. Staud, By Far and Cult Gaia have more advantages in price range, but small brands with outstanding designs have begun to take the hearts of Chinese consumers.

Benjamin Cavender, the managing director of the China market research group, said: "if the brand does not work hard for product innovation or lacks a clear design spirit, it is very difficult to stand out." Coach has recently created many new products based on several popular IP, including Disney's Mickey Mouse, flying Dumbo and Star Wars. In November last year, it invited young people's fashion icon Jennifer Lopez to become a brand spokesperson. But Coach and Kate Spade and Stuart Weitzman are not good at making brand stories meaningful, and this is also an old disease that is often criticized by American brands. In last year's Expo, Tapestry did not specifically emphasize the number of exclusive Coach products they brought, but introduced their new product platform and new brand Logo. In addition to the classic C Logo, the carriages Logo was launched again. Yann Bozec introduced BoF at the time and said that using two Logo at the same time would bring greater competitiveness to the brand.

Tapestry had previously estimated that sales would be as high as $250 million, due to the serious impact of the new crown epidemic. Meanwhile, the group lowered its earnings per share in fiscal year 2020 from $2.57 to $2.15. With the expansion of the epidemic worldwide, the impact of physical retail stores is increasing. Not only is Coach, but all brands will face inevitable losses.

The group will release its third quarter financial report in fiscal 2020 in April 30th, and we can not tell what kind of answer Coach has been able to lead Zeitlin in over a short period of time.