By CultureBanx Team
- Jide Zeitlin will serve as Tapestry’s interim CEO
- In its fiscal Q4, Tapestry’s net income fell down to $148.9M
Coach, Kate Spade and Stuart Weitzman owner Tapestry (TPR +8.36%) is leaning on culture to revive sales with the appointment of its board chairman Jide Zeitlin as interim CEO. He will need to use his 30 plus years of global financial and operational experience, to help this American fashion conglomerate compete against the European giants like LVMH (LVMUY +1.57%) and Kering (KER.PA +2.05%).
Why This Matters: Zeitlin was formerly Tapestry’s Board Chairman, which he’s served on for over a decade after being elected back in 2006. Previously, he was a partner at Goldman Sachs (GS +2.64%). This new role makes Zeitlin one of the only Black CEOs of a major fashion company he’ll need to tap into his plethora of experience to tackle the company’s immense issues. Two of the brands, Kate Spade and Stuart Weitzman have been struggling with sluggish demand. In its fiscal Q4 earnings report, Tapestry’s net income fell down to $148.9 million from $211.7 million a year ago, and the company lowered its overall sales forecast for the year.
Zeitlin can have a major impact in evolving the company, along with accelerating growth at its new brands to spur investor confidence
This is where Zeitlin can have a major impact in evolving the company, along with accelerating growth at its new brands to spur investor confidence. In an interview, Zeitlin said Kate Spade remains a $2 billion or larger opportunity for Tapestry. The company is maintaining its fiscal 2020 outlook and expects to return approximately $700 million to shareholders.
The company renamed itself two years ago due to its acquisitions of Stuart Weitzman in 2015 and Kate Spade for $2.4 billion in 2017. In the most recent quarter net sales for Coach rose 2% to $1.1 billion. However, Kate Spade and Stuart Weitzman didn’t perform quite as well and net sales came in at $332 million and $85 million respectively. Shares of Tapestry are down 52% in the past 2 years bringing it to a market cap of around $6.5 billion.
What’s Next: All three of Tapestry’s brands are preparing to unveil their spring 2020 collections. Coach and Kate Spade at New York Fashion Week and Stuart Weitzman in Milan. Time will tell if an industry that could benefit from having more people of color in positions of power like Zeitlin, will help Tapestry’s brands become successful.
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