TAPESTRY takes off 855 million dollars on Kate Spade- and makes a big doubt about its strategy to convert weak performance brands

It turns out that TAPESTRY could not even circumvent a trademark owned for years, before Capri News announced in 2023. TAPESTRY said on Thursday that it took $ 855 million in Kate Spade to a large extent due to a decrease in the current and future expected cash flows in addition to the investments made by the company.

However, the company continues to claim Kate Spade, as sales decreased by 10 % last year, which could flourish with more work. But Tapestry bought Kate Spade, which is loved by its strange bags and requirements, eight years ago for $ 2.4 billion, and it has little to show it so far. In the fiscal year ending in June, Kate Spade sales amounted to about $ 1.2 billion, and a lesser touch than the year when the company was obtained, and much less than its top three years ago when they approached $ 1.5 billion.

“We know from work that we have created a large request on the Kate Spade brand brand Baron Thursday.

In 2017, Coach Inc. Also possessed the Smart brand with high -high shoes, which he called herself in the hope that it will become an American reward for European fashion blocs LVMH and dryAnd if it focuses on high -end brands instead of explicit luxury. These aspirations were behind the planned 8.5 billion megapixels to buy Capri, which owns Versace and Jimmy Chu. (Capri recently sold Versace to Prada, although this deal has not been closed yet).

However, the Federal Trade Committee prevented the Tapestry-Capri deal last year, saying it had been affected by competition in the handbag sector. The logical basis for Tapestry was that joint resources (large technology systems, separators with sellers and store owners) would help improve the brand cost structure and raise the brand with poor performance but still applied. But given its conflicts in order to make the Kate Spade acquisition of its fruits, it is difficult to see how Tapestry managed to overcome three other brands that need to be repaired.

However, it is not all bad news. TAPESTRY Ashraf Ashraf has an amazing rehabilitation of the trained brand in recent years, reminiscent of Ralph Lauren’s great return.

A decade ago, the classic brand of New York’s leather goods, loved for its elegant high -quality bags, was hurting after years of excessive search for growth and reduced itself in the end. Since then, the trainer has made a tremendous return by selling more through his stores and less in stores, and arming them with tons of data around shoppers and their customs to reduce the imbalance of the products and know what they are forcing towards more quickly and accurately.

One of the Kate Spade paradoxes from TAPESTRY is that in 2017, she said that the purchase of Kate Spade would help her to beat younger consumers. Today, the Gen Z and the two younger millennium shoppers throughout the coach represent about 60 % of the fabric of the new shoppers of 1.5 million people won last year. Neil Sonders, the administrative director of Globaldata, says Coach has won it through his data, but also because the coach “has become more contemporary and on the direction.”

With the spread of Kate Spade (and the Stuart Weitzman, which was recently unloaded), the coach represents approximately 80 % of textile sales. So Tapestry is really just a trainer in addition to a five -size brand, instead of a portfolio. Last year, the coach’s sales increased by 10 % and paired TAPESTRY shares, almost doubled them. (They fell to a large extent due to $ 160 million of customs tariffs.)

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