Kate Spade from ugly duckling to swan. The last few months have seen the turning point pursued over the last two years by Tapestry, its parent company. In the last quarter, which ended on January 1, 2022, the brand’s sales were up 33% year-on-year, and 16% above pre-pandemic levels. A record high. “And we’re doing it with stronger operating margins,” says Tapestry CEO Joanne Crevoiserat. This goal is to reach 2 billion dollars in sales soon. The last fiscal year ended with 1.2 billion dollars in sales (down 11% compared to two years earlier).
The turning point
The symbol of Kate Spade’s resurgence is the sequined slice pizza bag. “It was a great product for the Christmas holidays that consumers brought to their parties. And who doesn’t want a slice of pizza after a party? It was a success,” observes Crevoiserat. “It is clear that the transformation efforts we have undertaken are coming to fruition. We delivered a record quarter, the festive quarter. And a significant turning point, but this is driven primarily by the product”.
Where the momentum comes from
Strength in digital, the acquisition of new customers and the revival of dormant ones. These are the factors that were Kate Spade drivers. The brand has increased determining pricing power of the bags and, therefore, has seen an increase in full-price sales. “We know that the brand is growing, but there is still a long way to go”, the CEO concludes. The difficulties come from the supply chain (“we would like to have a bit more inventory”) and the untapped potential in China. “But with the return to the office, our work bags, backpacks, tote bags and briefcases are also doing well”.
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