Tapestry isn’t worried about meeting demand this holiday season.
The New York City-based parent company of Coach, Kate Spade and Stuart Weitzman, just announced results from another strong quarter. In a call with investors, executives maintained an optimistic outlook ahead of the holidays thanks to a strong inventory position, rising demand for products and effects from the company’s Acceleration Program, which leverages data and analytics to improve omnichannel capabilities.
“We’re well-positioned as it relates to inventory,” Tapestry CEO Joanne Crevoiserat told FN in an interview. “We’ve moved aggressively to secure air freight and to make other changes to make sure that we can deliver for our customers this holiday and satisfy what we see as, frankly, rising demand for our brands.”
Port congestion, factory shutdowns and labor shortages are all part of a global supply chain crisis that is dominating every conversation this holiday season. In some cases, the delays are putting certain brands and retailers in jeopardy of missing crucial inventory targets, which has prompted many to order more product earlier in advance.
Tapestry has leaned into its data and analytics capabilities to make choices related to pricing as well as product and inventory management. Higher demand has translated to stronger pricing power across all three brands. All three of Tapestry’s three brands delivered a higher AUR, or the average price per unit at retail, in Q1. For Coach, the company’s largest brand, Q1 marked the 10th consecutive quarter of AUR growth in North America.
“We achieved that because we’re really focused on our clients and growing the new customer base, increasing their frequency of purchase by really responding to their emotional and functional needs with an authentic voice and compelling product,” Todd Kahn, CEO and brand president of Coach, told FN in an interview.
Like other large brands, Tapestry is not immune to industry-wide labor shortages. In September, the company raised its minimum wage for store employees to $15 per hour and said it would grant a one-time appreciation bonus of $500 and $1,000, respectively, to store associates and managers who do not otherwise participate in Tapestry’s annual incentive plans.
Other retailers have also begun offering higher starting wages and benefits to attract and maintain talent. Macy’s also said it would boost its minimum pay to $15 per hour. At Kohl’s, hourly store, distribution center and e-commerce fulfillment center employees who work through the holidays will be eligible for a bonus of between $100 and $400. Amazon, meanwhile, bumped its average starting wage to more than $18 per hour to meet its goal of hiring 125,000 fulfillment and transportation employees, with some warehouses offering a $3,000 sign-on bonus.
“I feel that we have the best team in retail and we are investing behind our team to differentiate our company,” Crevoiserat said. “You’ve seen us make the investments we need to ensure that we deliver great service and great experience for our customers this holiday.”