Kate Spade Aims for $2 Billion
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Tapestry Inc. on Wednesday reiterated its plans to grow Kate Spade to a $2 billion brand.
“The Kate Spade brand has tremendous runway and we still have confidence in the brand’s long-term potential,” Joanne Crevoiserat, chief executive officer of Tapestry, said during Bank of America’s Consumer & Retail Technology Virtual Conference on Wednesday. “The team is making changes in the brand, really crystallizing the brand’s purpose and returning it to the core strength of the brand.”
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Those changes include updating Kate Spade’s creative team. Earlier this month, the company, which also owns the Coach and Stuart Weitzman brands, said it was revising the structure of its creative organization with two new roles: senior vice president of brand concept and strategy, as well as the job of head of product design, as Kate Spade creative director Nicola Glass makes her exit.
Glass, who joined Kate Spade in late 2017, was “very, very highly respected” at Tapestry, Ike Boruchow, senior retail analyst at Wells Fargo, has previously commented to WWD. Likewise, then chief executive officer of Tapestry Jide Zeitlin expressed optimism for the Kate Spade turnaround in late 2019 — despite continued sales declines at the brand — saying that new products introduced by Glass were still making their way into stores and outlets in North America. In November 2019, Zeitlin estimated that only about 25 percent of products in North American stores that fall were from the Nicola Glass designed collection.
Whether or not availability of Glass’s merchandise was cause for shrinking revenues is unclear. What was clear was that the confidence expressed for Kate Spade’s future was pre-pandemic, before the world shut down for months on end and the need for going-out fashion came to a halt. Tapestry has been in recovery mode for the last two years and Glass’ departure, which officially takes effect on April 1, is part of a larger C-suite reshuffle.
In fact, the company has overturned its entire senior-leadership team in that time period — including twice in the CEO suite. Former Kate Spade CEO Anna Bakst left the firm at the end of 2019. Liz Fraser, a Lafayette 148, Anne Klein and Marc by Marc Jacobs alum, took over the helm of Kate Spade as CEO and president the following March.
Already, the Kate Spade brand is showing signs of recovery. While all three Tapestry brands logged sales declines in the most recent quarter, Wall Street was still satisfied with the company’s progress.
Categories such as pajamas, loungewear and accessories continued to show strength at Kate Spade. But Crevoiserat added that — even during the pandemic and work-from-home culture — some Kate Spade novelty items are once again beginning to resonate with shoppers.
“Last summer, in the middle of COVID-19, we were just coming out of lockdowns and one of our bestselling items at Kate Spade was a full-priced pineapple handbag,” the CEO said during Wednesday’s conference. “It’s not what anyone needed in the middle of the summer, a full-priced pineapple handbag. But it brought that consumer a little bit of joy and it was a little bit of a treat. And so that’s how we see consumers continuing to engage with the category.”
Kate Spade also managed to attract about 500,000 new customers to the brand last quarter through its digital channels, while simultaneously reengaging existing customers (40 percent more than in 2020’s fiscal year second quarter).
“So that gives us an understanding that we are reaching our core consumer base and reengaging them,” Crevoiserat said. “And that’s through smarter marketing techniques. We’ve embedded a test-and-learn framework and we’re ideating and scaling the wins. And so the teams are increasingly able to reach and spend our marketing dollars more wisely, but also understand how to reach consumers in a new way.
“And then foundationally, we’re working on the product and really stabilizing and moving forward the core leather goods,” she added.
Shares of Tapestry, which closed down 1.08 percent to $42.89 a piece on Wednesday, are up approximately 144 percent year-over-year.
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