Owner of Coach, Kate Spade Ousts CEO
04 Septiembre 2019 - 9:54AM
Noticias Dow Jones
By Suzanne Kapner
The handbag company that combined the Coach and Kate Spade
brands ousted its chief executive a little over two years after a
merger that was supposed to create a U.S. fashion powerhouse.
Tapestry Inc. said Victor Luis, who has been CEO for five years,
is leaving immediately and will be succeeded by board Chairman Jide
Zeitlin. Mr. Zeitlin is a former Goldman Sachs executive who has
been on the board since 2006.
Coach changed its name to Tapestry in 2017 after spending $2.4
billion to acquire Kate Spade & Co., a U.S. rival whose founder
was no longer involved in the brand. Mr. Luis viewed the deal as a
way to reach younger shoppers and build a collection of brands that
could better compete with European rivals. In 2015, Coach purchased
the Stuart Weitzman footwear brand.
But the Kate Spade brand has struggled. Sales at Kate Spade
stores open at least a year fell 6% in the three months that ended
June 29, and the brand's margins contracted on higher discounting.
That prompted Tapestry to lower earnings guidance for the year,
which sent its stock plunging 22% in a single day. The shares have
fallen by more than half during the past year.
In an interview, Mr. Zeitlin said the company was committed to
its multibrand strategy, but needed to work on execution. "There
has been a gap between strategy and delivery," he said.
Tapestry's other two brands, Coach and the much smaller Stuart
Weitzman, have performed better. Sales at Coach stores open at
least a year rose 2% in the latest quarter.
But some analysts question the portfolio, saying it isn't built
on strong brands. "Tapestry's strategy is flawed," said Randal
Konik, an analyst at Jefferies. "The Coach brand is stagnating" and
the "Kate Spade brand is a big problem."
Mr. Zeitlin, who will remain board chairman, said he wasn't
planning any management changes at Kate Spade or elsewhere in the
company. He said the board plans to launch a search for a permanent
CEO at some point in the future. The company also said board member
Susan Kropf, a former Avon executive, has been named lead
independent director.
Tapestry said Wednesday it is maintaining its recently lowered
fiscal 2020 financial outlook and continues to expect to return
about $700 million to shareholders through its dividend and
repurchase programs.
Coach, Kate Spade and Stuart Weitzman have battled a retail
environment that has been challenging, especially for designers
with significant exposure to department stores, where traffic has
declined.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com
(END) Dow Jones Newswires
September 04, 2019 10:39 ET (14:39 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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