Dive Brief:
- Tapestry Inc. announced Thursday Eva Erdmann as president and CEO of the Kate Spade brand, effective October, according to a company press release.
- Erdmann was most recently global president of Urban Decay Cosmetics at L’Oréal. She succeeds Liz Fraser, who will leave the company next month. Fraser has been in the role since 2020.
- In her new role, Erdmann will be tasked with “accelerating innovation to drive consumer connections and sustainable global growth,” per the release, and will report to Tapestry CEO Joanne Crevoiserat.
Dive Insight:
The new hire comes as Kate Spade has been experiencing revenue declines. In Tapestry’s most recent earnings report in May, Kate Spade’s revenue fell 6%, and the brand has seen revenue decline for four consecutive quarters.
David Swartz, senior equity analyst for Morningstar Research Services, said in an email to Fashion Dive that a management change at Kate Spade wasn’t surprising because the brand has been struggling.
“Kate Spade’s sales have been falling over the past few quarters and its profitability is low for a handbag brand,” Swartz said. “The brand has too much exposure to department stores and outlets and its pricing isn’t very strong. For the most part, Kate Spade has been a disappointment ever since it was acquired.”
Tapestry bought Kate Spade in 2017 for $2.4 billion. Though Tapestry’s management has been working to turnaround the brand, its sales aren’t much different from the time it was acquired, per Swartz.
Erdmann’s experience at an international company like L’Oréal could make her a good fit for Kate Spade, Swartz said, because the brand is “too dependent on” North America.
“[I]ts sales in China and Europe are very small even though these are important markets for luxury brands,” he said.
In the news release on Erdmann’s hire, Crevoiserat said Erdmann was “the right leader to unlock the significant runway for growth” at Kate Spade.
“She is a talented global brand-builder with a deep understanding of the rapidly evolving consumer landscape and a demonstrated ability to cultivate desire, cultural relevance, and passionate communities for distinctive luxury brands,” Crevoiserat said.
Tapestry, which also owns Stuart Weitzman and Coach, is set to report its next earnings results on Aug. 15.
Meanwhile, Tapestry is facing a Federal Trade Commission lawsuit over its proposed merger with Capri Holdings, owner of Michael Kors, Versace and Jimmy Choo. The FTC said the deal would “eliminate fierce competition between the two companies,” and give Tapestry a dominant share of the “accessible luxury handbag market.”
Both Tapestry and Capri have disagreed with the decision, and Tapestry said it still expects the deal to close within the calendar year.
