CEO Of Coach Parent Company Tapestry Resigns Amid Misconduct Allegations

CBx Vibe:High Fashion” Roddy Ricch

By CultureBanx Team

  • Jide Zeitlin, CEO of Tapestry, stepped down amid an investigation into personal misconduct
  • In its fiscal Q2 earnings, net sales for Coach and Kate Spade came in at $1.2B, $430.4M respectively

On Tuesday amid an investigation into his personal behavior, Jide Zeitlin, CEO of Tapestry (TPR +0.37%), stepped down from the fashion conglomerate’s top post. After less than a year in the role, the parent company of Coach, Kate Spade, and Stuart Weitzman hired a law firm to assess allegations from at least one woman of Zeitlin posing as a photographer under an alias, to lure her into a romantic relationship. With Zeitlin gone, will Tapestry be able to compete against the European giants like LVMH (LVMUY +0.16%) and Kering (KER.PA -2.97%)?

Why This Matters: Tapestry thrived during Zeitlin’s brief tenure, as one of the few Black CEOs in the Fortune 500. He had been with the company for 14 years including his time as a board director. Prior to Zeitlin taking over two of the brands, Kate Spade and Stuart Weitzman had been struggling with sluggish demand. However, there had been a recent turnaround in its fiscal Q2 earnings, as net sales for Coach, Kate Spade and Stuart Weitzman came in at $1.2 billion, $430.4 million and $115.7 million respectively. These numbers are helping position Tapestry as a formidable competitor to the large European fashion houses. Also, the company plans to return about $700 million to its shareholders in fiscal 2020.

Zeitlin, who took the helm of Tapestry in September 2019 is just the latest in a series of top level executive departures at the Coach handbag maker over the last year

Zeitlin, who took the helm of Tapestry in September 2019 is just the latest in a series of top level executive departures at the Coach handbag maker over the last year. Since December, the company has also seen the exits of the heads of its Coach and Kate Spade brands. The board claims his departure didn’t result from any disagreement with the company or matter relating to its finances or operations.

However, Zeitlin’s departure has raised many personal conduct concerns.Tapestry’s board hired an external law firm to gather information about his photography alias, that lured a woman into a romantic relationship more than a decade ago, according to a person familiar with the situation.

It seems as if the board took investigative action due to journalist William Cohan’s questions, in pursuit of these allegations for ProPublica. In a lengthy personal LinkedIn post Zeitlin says the relationship was a mistake and unrelated to the Tapestry role. He claims the main reason for leaving the luxury-goods company is to avoid being a distraction, due to a romantic relationship predating his becoming CEO.

What’s Next: Tapestry’s CFO has been appointed interim CEO while the company begins its search for a permanent replacement. Shares of Tapestry are down more than 70% in the past 2 years, bringing it to a market cap of around $3.7 billion. The company is expected to report financial results in just a few weeks on Aug. 13.

CBx Vibe:High Fashion” Roddy Ricch

CONTRIBUTOR

CultureBanx Team

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