Heart-shaped Kate Spade bag sold out after going viral on TikTok: Tapestry CEO
Tapestry CEO Joanne Crevoiserat told CNBC on Thursday the company saw a surge in demand for a heart-shaped Kate Spade bag that went viral on TikTok last month.
“We were able to harness that. The bag sold out. We got it restocked. We’re learning how to engage that community better and better,” Crevoiserat said in an interview on “Closing Bell,” after the retailer reported better-than-expected earnings for its holiday quarter earlier in the day.
Crevoiserat’s comments provide another example of the potential social media platforms like TikTok represent for Tapestry and other consumer brands. Its influence appears to stretch categories, too. For Tapestry, the increasingly popular app drove sales for its crossbody heart bag while toy companies also have seen sales growth linked to TikTok during the pandemic.
TikTok’s potential for brands is perhaps best exemplified by Walmart’s decision to pursue a minority stake in the app’s U.S. operations. The deal, first announced in September, remains pending. But in October, Walmart CEO Doug McMillon detailed TikTok’s allure for the retail giant in a CNBC interview.
“If you’re watching a TikTok video and somebody’s got a piece of apparel or an item on it that you really like, what if you could just quickly purchase that item?” McMillon said then on “Squawk Box.” “That’s what we’re seeing happen in countries around the world. And it’s intriguing to us, and we would like to be part of it.”
Tapestry shares closed higher by 4.6% Thursday to $36.18 apiece after the New York-based company beat Wall Street forecasts on the top and bottom lines. Although quarterly sales of $1.69 billion were down 7% compared with a year earlier, it reported a triple-digit increase in digital sales globally. In addition to Kate Spade, Tapestry owns the Coach and Stuart Weitzman brands.
The company’s stock is up more than 160% since early August and notched a fresh 52-week high during Thursday’s session.
Crevoiserat said she’s been pleased with how Tapestry scaled up its e-commerce operations during the pandemic, as consumers stayed home and did more shopping online. The company’s $1.3 billion online sales over the past 12 months is “more than double where we were a year ago,” she said. “We’ve had the capabilities and we’re getting better and better at engaging consumers on digital channels and on social channels.”
Tapestry still sees brick-and-mortar locations playing a key role even with its online growth, said Crevoiserat, who became permanent CEO in October. She’d been serving as interim since July.
‘We think stores are still important, and we’ll continue to innovate in our stores,” she said. “We have raised our expectations around productivity and profitability for our store fleet, but we think that physical touch point, that manifestation of the brand in a physical way, is important for consumers.”