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Dive Brief:
Dive Insight:
If the proposed merger between Tapestry and Capri is completed, it would create the fourth largest luxury house in the world. The FTC argued, however, that the merger would eliminate “direct head-to-head competition” among the two companies’ owned brands and give Tapestry a dominant share of the “accessible luxury” handbag market. In its filing, the FTC said Tapestry had coined that term itself “to describe quality leather and craftsmanship handbags at an affordable price.”
In a call with analysts, CEO Joanne Crevoiserat said the company had been prepared for the FTC challenge, which came following “unconditional approval from the European Commission and regulatory approvals in China and Japan.”
“Our timeline always contemplated the potential for litigation, and we continue to expeditiously work to close the transaction in calendar year 2024,” Crevoiserat said. “In the meantime, and as always, we remain focused on continuing to execute on our current business and strategic growth agenda.”
Despite the decline, Crevoiserat said in the Q3 release that earnings had beat expectations.
“Our talented global teams continued to advance our long-term initiatives, fueling innovation and consumer connections, while successfully harnessing the power of our customer engagement platform to navigate the dynamic backdrop with focus and agility,” Crevoiserat said in the release. “Moving forward, we are confident in our vision for the future and the significant runway to drive sustainable growth and shareholder value.”
On the call, Crevoiserat also discussed the challenges for Tapestry’s two smaller brands.
At Kate Spade, Crevoiserat said that many of the brand strategies that were applied to Coach would be “things we're applying to Kate. Kate’s an earlier inning and…we continue to have confidence in the runway that we see ahead for the brand.”
Meanwhile, Crevoiserat said on the call that Stuart Weitzman’s Q3 results “were pressured, reflecting headwinds in the brands two key markets of North America and Greater China.”
The company revised its 2024 outlook and projected revenue of “over $6.6 billion, approximately in-line with prior year” with a growth “of approximately 1% on a constant currency basis.” In Q2, the company forecasted a slightly more positive outlook of $6.7 billion in revenue for the year.
via https://www.aiupnow.com
Lara Ewen, Khareem Sudlow
