Dive Brief:
- Tapestry has increased its equity stake in recycled leather manufacturer Gen Phoenix to 9.9%, according to a press release.
- The Coach and Kate Spade owner is participating in the startup’s $15 million funding round, and the new investment nearly quadruples its initial stake in the company in 2023, per the release.
- The deal also includes a three-year contracted supply agreement.
Dive Insight:
The partnership makes Gen Phoenix a core material innovation partner for Tapestry and allows the startup to bring its material to the Coach and Kate Spade brands with consistency at scale, per the release.
Tapestry and Gen Phoenix initially partnered in 2022, which led to the launch of the Coachtopia subbrand the following year.
Since then, the two companies said their partnership has evolved beyond a typical vendor relationship and could be used as a blueprint for future material innovation between materials companies and brands. Tapestry and Gen Phoenix shared research and development access, factory floors and design insight, per the release.
The new agreement gives Tapestry supply chain resilience and the opportunity to align with the next generation of consumers’ values, per the release. The company has made a recent push to connect with Generation Z, a reportedly environmentally conscious generation. The strategy has been paying off, with the company continuously logging revenue increases and gaining new customers.
However, Tapestry’s leather sourcing practices have come into question recently when environmental nonprofit Earthsight said Coach’s leather is at risk of being sourced from areas with deforestation. In response, Tapestry said it has launched various initiatives to create a deforestation-free leather supply chain.
Meanwhile, Gen Phoenix’s $15 million funding round is led by venture capital firm Material Impact. The startup plans to use the money to expand into new categories and global markets, scale production at its U.K. facility, and accelerate research and development to commercialize circular leather.
The startup deconstructs leather waste into fibers to form a new raw material. It has similar qualities to traditional leather, but with an 85% lower carbon footprint, CEO John Kennedy told Fashion Dive last year. Gen Phoenix initially launched in the mass transportation seating category, creating leather for aviation, bus and rail seats.
In addition to partnering with Tapestry in the fashion space, Gen Phoenix is working with footwear brand Dr. Martens on a capsule collection made from its material, with more to come.
Other Gen Phoenix investors include InMotion Ventures, the investment arm of Jaguar Land Rover, ETF Partners and the Hermes GPE Environmental Innovation Fund.
