A day after Jide Zeitlin made a commitment to run the company for the next three years, Tapestry’s chairman and CEO is ready to run.
“We are going to focus on becoming much more consumer centric than we have been,” said Zeitlin, who first assumed the top job last fall. “We want to be data driven in a proactive way as opposed to many corporations who approach it in a reactive way.”
The CEO said that while data is often talked about as it relates to the front-end of the business, the back-end component is even more critical. “What we’re talking about is much more operational — how we analyze and use the data,” Zeitlin noted.
Data will be critical for the company — and the entire industry — as the coronavirus situation continues to develop.
But the executive said he is more focused on the company’s business fundamentals during a time of change and challenge. “Our heart goes out to the people impacted by this. It will pass. History tells us that when these types of shock waves come and [go], consumers across our three brands come back — and come back strong,” Zeitlin said.
Change has been a constant at Tapestry in the early months of 2020, and all three of its brands — Coach, Stuart Weitzman and Kate Spade — will now have new leaders at the top. On Monday, Zeitlin said Coach CEO Josh Schulman would exit.
“We’re disappointed to be losing Josh, but we’re mindful of the fact we’ve got a powerful Coach brand with an extraordinary leadership team. It’s a great bench,” Zeitlin said. He noted that the brand, which has seen impressive momentum, has a number of big opportunities, including expansion in shoes.
Last month, Coach made its biggest footwear move in years with the launch of the CitySoles sneaker collection. Growth of the outlet business is also high on the agenda, and Zeitlin reiterated the continued potential for the brand in China “once we get through [the] coronavirus.” The $4.3 billion Coach brand accounted for 71% of company’s revenues in fiscal 2019.
Tapestry delivered a second-quarter earnings and sales beat, posting adjusted EPS of $1.10, versus consensus bets of 99 cents, on profits of $298.8 million. Revenues rose 1% to $1.82 billion, compared with estimates of $1.81 billion.
The company said the coronavirus outbreak could impact its second-half results and is expecting a $200 million to $250 million dent in sales and a reduction in earnings per share of 35 cents to 45 cents. It downwardly revised its guidance, now projecting full-year revenues of roughly $5.9 billion and EPS in the range of $2.15 to $2.25.
In the interview today, Zeitlin said that Kate Spade, now led by Liz Fraser, continues to take the right steps to get back on track. “We’re defining the pillars of the brand so we can make sure the product is spot on,” Zeitlin said, noting that Kate Spade has introduced more novelty items and is offering a broader assortment of key silhouettes.
Finally, at Stuart Weitzman, Zeitlin believes the fixes are more straightforward, though that “doesn’t mean they’re any easier.” He said the label represents a fusion of fashion and comfort, and that will be a strong advantage going forward.
Giorgio Sarné took the helm at Stuart Weitzman earlier in March after former CEO Eraldo Poletto departed.