Tapestry Inc. is a modern luxury lifestyle brand with headquarters in New York. They describe themselves as “a leading global house of brands” who “unite the magic of Coach, Kate Spade New York, and Stuart Weitzman”. All three headline brands are synonymous with American fashion and have a global presence.
Prior to 2017, Tapestry Inc. had been trading under the name of Coach, Inc. The name change was to create a distinct corporate identity away from its primary fashion brand and to show the company’s potential. ‘Tapestry’ was chosen as a reflection of the company’s values of innovation, creativity, authenticity, and optimism.
This article takes a deep dive into everything you need to know about Tapestry Inc, its brands, and its current CEO
About Tapestry
Tapestry describes its brands as being “defined by inclusivity, rather than exclusivity”. This ethos fits the fact that their fashion brands sit on the tier of attainable luxury. They’re considered investment pieces but sit at a price point where most people can comfortably afford to purchase from the stores. The company’s current tagline is “iconic brands, expansive possibilities”.
The company currently operates around 1,500 stores internationally across its three fashion brands. Tapestry currently employs an estimated 17,300 employees globally.
In July 2021, Tapestry announced its new Tapestry Foundation as part of its people-centered, purpose-led strategy. It’s been launched with an ambition to improve access and equity initiatives while helping to combat climate change. They based the Foundation on the company’s corporate responsibility agenda, ‘Our Social Fabric’, which focuses on making positive change.
As part of the announcement for its foundation, Tapestry committed itself to pay hourly employees a minimum wage of $15 and a special appreciation bonus for its employees in global stores.
The company has made an initial contribution of $25 million to their foundation, with the Coach Foundation giving $25 million as an endowment.
The Tapestry brands
Tapestry’s brands are defined as being “approachable and inviting” as attainable everyday luxury fashion brands. Each is known for its creativity, craftsmanship, and quality. Tapestry owns three infamous American fashion brands – Coach, Kate Spade New York, and Stuart Weitzman.
Coach began as a family-run workshop for leather accessories in New York in 1941. It began with six artisans who set out to create functional and beautiful accessories with the finest leather and craftsmanship. The brand is considered to be a pioneer in leather goods within the United States, having originally established itself as the ‘Original American House of Leather’.
The brand has stayed true to its leather heritage over the last 75 years, continuing to make and produce leather handbags and accessories. This all-American brand is known for its contemporary luxury pieces and free-spirited attitude. Coach has become synonymous with the idea of the effortless chic of New York fashion.
Kate Spade New York is famous for its whimsical and quirky designs, being the first ‘designer’ brand that most American women buy from. It launched in 1993 with a collection of six core handbags. The brand has always stood for feminine designs, bold colors, and its optimistic outlook.
The accessories brand has expanded over the years to include everything from ready-to-wear and footwear to home décor and gifts. Kate Spade has a unique and distinctive DNA, being unapologetically feminine in an age of neutral color palettes and minimalism.
Stuart Weitzman is one of America’s leading accessories brands and is known for its purpose-driven attitude and bold designs. The brand is synonymous with its ability to blend function and fit with the latest trends to create practical designs that work in everyday life.
Its design focus has always been on creating footwear and accessories that give consumers the feeling of effortless chic. The brand believes that comfort and craftsmanship go hand in hand to help empower women.
Tapestry is linked to the Coach Foundation and the Kate Spade New York Foundation as their parent company.
When Tapestry acquired Kate Spade, it was widely thought that the company would come to dominate the market of ‘Modern Luxury’ with contemporary and mid-tier brands. Since its acquisition, Tapestry has struggled to get Kate Spade onto an even footing, already undergoing a change in its Creative Director and design team as it struggles to evolve without losing its core demographic.
Recent Q4 reporting appears to suggest that the tide is starting to turn. All three brands within the Tapestry company saw year-on-year growth. Coach was up by 130%, with Stuart Weitzman experiencing 156% growth and 108% growth for Kate Spade.
The leadership team at Tapestry
The Board of Directors for Tapestry is headed by Susan Kropf, an independent chair. Members of the board include John P. Bilbrey, Darrel Cavens, Joanne Crevoiserat, David Denton, Anne Gates, Thomas R. GRECO, Pam Lifford, Annabelle Yu Long, and Ivan Menezes.
Liz Fraser serves as Chief Executive Officer and the Brand President for Kate Spade New York. Giorgio Sarne is the Chief Executive Officer and Brand President for Stuart Weitzman. Finally, Todd Kahn currently serves as the Chief Executive Officer and Brand President for Coach.
Deloitte and Touche, LLP serves as the independent auditors for Tapestry. One of the biggest controversies around Tapestry has come from its former CEO, Jide Zeitlin. He took up the role in September 2019 but stepped down the following summer following allegations of misconduct.
The current CEO, Joanne Crevoiserat, is the third CEO in a short term. Zeitlin’s predecessor Victor Luis had also struggled to find a way to leverage Tapestry as a luxury company to take on the popular European fashion conglomerates.
Tapestry on the Stock Exchange
Tapestry had its initial public offering as Coach, Inc. in October 2000. On October 31st, 2017, the name switched to Tapestry. They trade on the New York Stock Exchange under the stock symbol TPR. The initial public offer was for $16 per share, with a current equivalent of $2 per share following three stock splits that occurred in 2002, 2003, and 2005.
The company is included in the S&P 500 Index. You can find extensive coverage on Tapestry’s stock positions within national brokerage firms.
Tapestry announced a temporary suspension of its dividend program in March 2020 as a result of the global pandemic. They made the last quarterly dividend payment in March 2020 of $0.33375 per common share for shareholders who had a record by the close of business on March 6th. The company’s current strategy is to return capital to its shareholders through traditional dividends on a long-term basis, stating that the board would evaluate the temporary suspension when appropriate. Tapestry offers a dividend reinvestment plan.
In August 2021, Tapestry announced it was reinstating its dividends but at a lower rate. Their plan includes returning over $750 million to its shareholders over fiscal 2022. With the outlook appearing positive for Tapestry, the Board of Directors approved the return of their dividend scheme
The quarterly cash dividend is now $0.25 per common share, payable on September 27th to shareholders with shares by the close of business on the 7th. The anticipated annual dividend rate is $1.00. Tapestry has announced that it plans to increase its dividend faster than its earnings growth rate. Its plans also include repurchasing around $500 million worth of its stock over fiscal 2022. Through share repurchases and dividends, it plans to give $750 million to its shareholders.
Tapestry stock currently sits at $40.58 on the New York Stock Exchange. Its 52-week range is $14.14 – $49.67, with a market cap of $11.345 billion. Tapestry’s stock has been falling despite out-performing expectations for its Q4 and 2021 fiscal year. A similar fell occurred after Tapestry also released better-than-expected Q3 results. Barron’s currently has Tapestry stock weighed as overweight with a price target of $54.89.
Tapestry’s positive Q4 reporting and growth
Its Q4 revenue was recorded at $1.62 billion, outpacing its FY19 pre-pandemic growth levels. Its e-commerce sales are largely to account for its recent Q4 success as it generated three-figure global digital gains. Tapestry has now reached $1.6 billion in e-commerce sales, primarily driven by the acquisition of new customers. Q4 saw Tapestry achieve a record annual operating margin. They outperformed their expectations for all three brands while reinvesting into the future of the company – primarily through digital.
Growth in China and the success of their e-commerce platforms are largely to thank for Tapestry’s revenue growth, exceeding its pre-pandemic levels for the first time. Digital growth grew 35% year on year and more than 200% compared to its pre-pandemic position. This Q4 growth has been primarily driven by the success of Coach following its recent switch in focus, with the brand currently having a number of ‘it’ bags.
Tapestry has also announced that it plans to repay its July 2022 bonds – worth $400 million – by the end of fiscal 2020. This announcement is in line with Tapestry’s goal of focusing on organic growth for profits and repayment of debts.
Meet Tapestry’s CEO – Joanne Crevoiserat
Joanne Crevoiserat currently serves as Chief Executive Officer for Tapestry, taking responsibility for the brand’s strategic growth agenda. Crevoiserat joined the company as Chief Financial Officer in 2019. She has over 30 years of experience with retail companies, including in finance and operations. Crevoiserat has a Bachelor of Science degree in finance from the University of Connecticut.
She took over the position as CEO originally on an interim basis after Jide Zeitlin resigned following misconduct allegations in July 2020. Crevoiserat was announced as the CEO in her own right in December 2020. Her promotion came at a time when Tapestry was struggling to realize its growth ambitions and was struggling in particular with its newest acquisition, Kate Spade.
There’s no denying that Crevoiserat faces a challenge with Kate Spade New York. Since its acquisition, Tapestry has struggled to take the colorful fashion brand and find a way to attract new customers without alienating followers of the brand.
Before becoming CEO, Crevoiserat served as the company’s Chief Financial Officer and was the interim CEO for Kate Spade from December to March. She joined Tapestry in August 2019 after departing Abercrombie & Fitch Co., having served as Chief Operating Officer and Executive Vice President during a period of significant change for the brand.
Crevoiserat has also held senior positions within the finance departments at Wal-Mart and May Department Stores. She served as Chief Financial Officer for Famous-Barr, Filene’s, and Foley’s brands. Crevoiserat also served on the At Home Group Inc. Board of Directors from January 2019.
When Crevoiserat became CEO of Tapestry, she announced a strategy to save an estimated $300 million on gross expenses while continuing her predecessor’s focus on data analytical and digital distribution investment. She’s taken a “customer-centric, data-driven approach” for the company whose brands primarily cater to professional and middle-class women, particularly in the handbag and leather accessories niche.
Crevoiserat has been praised for Tapestry’s recent Q4 success. For Fiscal Year 2022, the company expects revenue to hit an estimated $6.4 billion, with a net interest expense of $65 million. Under Crevoiserat’s tenure, Tapestry has recruited over 900,000 new customers in North America via its e-commerce platforms, accumulating almost 4 million new customers to purchase from the company in this fiscal year.
This fiscal year has also seen high growth amongst Chinese consumers and an optimized global fleet, with streamlining and changes to operating structure achieving a gross expense saving of $200 million. Crevoiserat plans to have a gross run-rate saving of $300 in the next financial year.
Crevoiserat told CNBC that “we’re just getting started” during a recent interview following the brand’s Q4 success. The company’s acceleration plan is being overseen by Crevoiserat, focusing on attracting new customers in new ways, particularly within the Asian market. The growth of the middle class within China and Tapestry’s focus on digital markets has been fuelling its success since Crevoiserat took over as the brand’s CEO.
You can find out more about Tapestry by visiting the company’s official website here.