Tapestry have a problem, namely Kate Spade. For the records, Victor Luis, former chief executive officer of the group, most probably lost his job because of its “non-positive” trend. Fashion designer Nicola Glass might go through the same experience, should sales keep slowing down.
Kate Spade affects Tapestry
Kate Spade sales keep going down. In fact, in the fourth quarter of the year, ended last June 29, they dropped by 6%. Expectations are not comforting at all, as sales will supposedly keep decreasing. The market, of course, is not happy about that. Because of it, Tapestry stocks have lost around one third of their value throughout 2019. In addition, they have been dropping by nearly 60% compared to last year.
What is going on?
“Everybody knows that we had a few glitches, while striving to assemble Stuart Weitzman and Kate Spade”, confessed Jide Zeitlin, Tapestry new chief executive officer (ad interim), while talking to Business of Fashion portal. Since the fashion brand appointed Nicola Glass as creative director, their new products have not thoroughly enticed buyers yet. “Kate Spade was already facing a difficult situation when they bought it out”, pointed out Rebecca Duval, Bluefin Research financial analyst. “Tapestry did not succeed in boosting their business, as professionals and insiders were expecting they would”. In May 2017, formerly Coach (which subsequently did a rebranding and became Tapestry) bought out Spade at 2.4 billion US dollars: at that time, though, the brand’s allure was not that seductive anyway. At present, the price range, which applies to 300/600-dollar-bags, is full at this point. Not only a few major companies, such as Coach and Michael Kors, but also several emerging brands are in control over it.
What experts think about
Neil Saunders, Global Data Retail general manager, pointed out: “Still we do not know much about Kate Spade’s customers, nor we know their taste and attitudes. In other words, the brand does not stand out in such a busy market”. Kaarin Vembar, on Retail Dive, has made a comparison between products created by Kate Spade and the ones by J. Crew, a medium-high end retailer. “Kate Spade is in trouble. On the one hand, sales are decreasing; on the other hand, they are adrift and they are getting far from what made them a renowned fashion company, from the nineties to the mid-2000s. The gist is that the brand suffers from a lack of insight and does not stand out, in the end, in the apparel and accessories market, which proves to be very competitive. They are similar to J. Crew, though they are doing worse than J. Crew”, harshly remarked the analyst.
The latest partnership
Quite a mess? For the time being, Spade replied by presenting a co-lab at the New York Fashion Week Kate Spade. Dr. Scholl is their partner. Together they decided to make a reinterpretation of traditional wooden sandal (bottom right in the picture), by recreating it in nine different tints. US Caleres group is the owner of the sandal trademark.
Pictures taken from katespade.com and businesswire.com