Tapestry Inc (TPR)

History and Background

Tapestry, Inc., formerly Coach, Inc., was founded in 1941 as a family-run workshop. It evolved into a leading American luxury lifestyle brand, later acquiring Kate Spade and Stuart Weitzman. The rebranding to Tapestry Inc. in 2017 reflected its multi-brand portfolio.

Core Business Areas

• Coach: Offers handbags, accessories, footwear, ready-to-wear, and lifestyle products, known for its accessible luxury appeal and iconic logo.
• Kate Spade: Focuses on handbags, apparel, jewelry, accessories, and home du00e9cor, appealing to a younger demographic with its playful designs and optimistic spirit.
• Stuart Weitzman: Specializes in designer footwear, celebrated for its innovative designs, quality craftsmanship, and focus on fit.

Leadership and Structure

Joanne Crevoiserat is the Chief Executive Officer. The company has a traditional hierarchical structure with functional departments such as Marketing, Finance, Operations, and Design overseeing each brand.

Key Offerings

• Coach Handbags: Coach's signature handbags are a major revenue driver. Market share varies by region but Coach remains a strong player in the accessible luxury handbag market, competing with brands like Michael Kors and Tory Burch. Revenue numbers is a significant portion of the overall brand, typically accounting for 50-60% of Coach's sales.
• Kate Spade Handbags: Kate Spade's handbags and accessories are also key products, known for their vibrant colors and unique designs. The company competes with competitors such as Michael Kors and Rebecca Minkoff. These account for roughly 60% of the brand's sales. They are geared towards a younger, fashionable demographic.
• Stuart Weitzman Boots: Stuart Weitzman's over-the-knee and other designer boots are popular, especially during the fall/winter seasons. Competitors are brands such as Jimmy Choo. Footwear makes up the majority of the brand's revenue.

Industry Overview

The fashion and luxury goods industry is experiencing evolving consumer preferences, increasing online sales, and a growing demand for sustainable and ethical practices. Brands face pressure to innovate and adapt to changing trends.

Positioning

Tapestry Inc. positions itself as a multi-brand house offering a diverse range of products across different price points, allowing it to cater to a broad customer base. Its competitive advantages include brand recognition, established distribution networks, and a diversified portfolio.

Total Addressable Market (TAM)

The global luxury goods market is projected to reach hundreds of billions of dollars. Tapestry Inc. is positioned to capture a significant portion of the accessible luxury segment within this TAM. The accesible luxury market is likely ~$100 billion.

Key Competitors

• KORS
• RL
• PVH

Competitive Landscape

Tapestry Inc. competes with other luxury and fashion companies on brand recognition, product quality, price, and distribution. Its advantages include a multi-brand portfolio and established distribution networks, while disadvantages may include dependence on handbag sales and vulnerability to fashion trends.

Kate Spade

• Year: 2017
• Acquisition Price (USD millions): 2400
• Strategic Rationale: Expanded Tapestry's portfolio to include a brand with a younger demographic appeal and a strong presence in the accessories market.

Historical Growth: Tapestry Inc.'s growth has been driven by organic sales growth within its brands, strategic acquisitions, and expansion into new markets. Historical data can be sourced from past annual reports and investor presentations.

Future Projections: Analyst estimates for Tapestry Inc.'s future growth vary, but typically consider factors such as brand strength, market trends, and macroeconomic conditions. Consensus estimates can be found on financial websites.

Recent Initiatives: Recent strategic initiatives may include product launches, marketing campaigns, e-commerce investments, and acquisitions aimed at driving growth and enhancing shareholder value.

Tapestry Inc. holds a strong position in the accessible luxury market due to its diverse brand portfolio and established distribution network. While its reliance on handbag sales remains a vulnerability, opportunities exist in expanding into new markets and product categories. Competitive pressures and economic uncertainties are key threats that require careful management. The company's strategic acquisitions have boosted growth, but integrating them effectively is crucial for long-term success.

Data Sources:

• Company filings, market research reports, financial news sources, analyst reports

Disclaimers:

The information provided is for informational purposes only and should not be considered financial advice. Investment decisions should be based on individual circumstances and thorough research.