Dive Brief:
- Tapestry’s international revenue grew almost 20% for the third quarter, led by a sales increase of approximately 20% in Greater China, and over 20% in Japan and other Asian markets.
- CEO Joanne Crevoiserat said, “Looking forward, we are well-positioned to deliver sustainable, profitable growth against a volatile backdrop. We’re harnessing the strength of our iconic brands, enhanced by our direct-to-consumer, globally diversified, and data-driven platform.”
- The New York-based company, which owns Coach, Kate Spade and Stuart Weitzman, has been repositioning Coach — its biggest brand in terms of stores and sales — to target younger customers as Tapestry aims to hit $8 billion in revenue by 2025.
Dive Insight:
Tapestry has navigated the luxury slump better than many of its competitors. The company delivered record second quarter earnings earlier this year, and a continuing partnership between musician Lil Nas X and Coach has helped keep the brand eye-level for Gen Z and millennial customers. The company said it picked up over 1.2 million new customers in North America, approximately half of whom were Gen Z and millennials.
Young consumers, specifically Gen Z and millennials, are key drivers of the luxury market right now, according to a report earlier this year by Bain and Company, which reported that millennials and Gen Z accounted for all of the luxury market’s growth in 2022.
“The spending of Gen Z and the even younger Generation Alpha is set to grow three times faster than other generations’ through 2030, making up a third of the market,” said Bain. “This reflects a more precocious attitude toward luxury, with Gen Z consumers starting to buy luxury items some three to five years earlier than millennials did (at 15 vs. at 18–20); Gen Alpha is expected to behave in a similar way.”
The younger consumer, who is also largely driving direct-to-consumer sales, may also account for Tapestry’s 10% DTC growth. They’re also driving the push toward new technology such as NFTs, which may help explain the presence of new Tapestry board member Alan Lau, who joined the company in April.
Lau is CBO for Hong Kong-based gaming software company and venture capital firm Animoca Brands, which develops NFT and blockchain products.
