Tapestry Targets $10 Billion Revenue for Coach Amid Market Expansion

What's Happening?

Tapestry Inc., led by CEO Joanne Crevoiserat, is redefining its approach to the global handbag market following the collapse of its $8.5 billion acquisition of Capri Holdings. Crevoiserat aims to expand the brand's reach by targeting a potential market of 1.9 billion consumers, where Coach and Kate Spade currently hold a 0.6 percent market share. The strategic plan, named 'Amplify,' seeks to increase Coach's revenue to $10 billion, return Kate Spade to growth by fiscal 2027, and improve operating margins by over 200 basis points by 2028. The plan emphasizes strong consumer connections, fashion innovation, and compelling experiences, aiming to future-proof growth by fostering a consumer-obsessed culture.

Why It's Important?

The expansion strategy is significant for Tapestry as it seeks to capitalize on a broader consumer base, particularly targeting younger generations entering the handbag market. By redefining the market scope, Tapestry aims to increase its market share and create long-term brand loyalty. The focus on emotional connections and innovation is expected to drive sustainable growth and shareholder value. The strategy also highlights the importance of adapting to changing consumer demographics and preferences, which is crucial for maintaining relevance in the competitive luxury market.

What's Next?

Tapestry plans to outline its three-year strategic plan at an investor meeting, focusing on expanding Coach's revenue and returning Kate Spade to growth. The company aims to leverage its strong foundation and consumer connections to achieve its ambitious targets. The strategy will involve increasing consumer participation and building brand loyalty from early purchases, which is expected to unlock significant lifetime value. Analysts have expressed optimism about the plan, noting the focus on timelessness and inclusivity as key drivers for growth.