Tapestry CEO says heart-shaped Kate Spade bag sold out after going viral on TikTok

Tapestry CEO Joanne Crevoiserat informed CNBC on Thursday the corporate noticed a surge in demand for a heart-shaped Kate Spade bag that went viral on TikTok final 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 mentioned in an interview on “Closing Bell,” after the retailer reported better-than-expected earnings for its vacation quarter earlier within the day.

Crevoiserat’s feedback present one other instance of the potential social media platforms like TikTok characterize for Tapestry and different client manufacturers. Its affect seems to stretch classes, too. For Tapestry, the increasingly common app drove gross sales for its crossbody coronary heart bag whereas toy corporations additionally have seen gross sales development linked to TikTok throughout the pandemic.

TikTok’s potential for manufacturers is maybe finest exemplified by Walmart‘s choice to pursue a minority stake within the app’s U.S. operations. The deal, first introduced in September, stays pending. But in October, Walmart CEO Doug McMillon detailed TikTok’s attract for the retail big 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 mentioned 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 greater by 4.6% Thursday to $36.18 apiece after the New York-based firm beat Wall Street forecasts on the highest and backside strains. Although quarterly gross sales of $1.69 billion had been down 7% in contrast with a yr earlier, it reported a triple-digit enhance in digital gross sales globally. In addition to Kate Spade, Tapestry owns the Coach and Stuart Weitzman manufacturers.

The firm’s inventory is up greater than 160% since early August and notched a contemporary 52-week excessive throughout Thursday’s session.

Crevoiserat mentioned she’s been happy with how Tapestry scaled up its e-commerce operations throughout the pandemic, as customers stayed dwelling and did extra buying on-line. The firm’s $1.three billion on-line gross sales over the previous 12 months is “more than double where we were a year ago,” she mentioned. “We’ve had the capabilities and we’re getting better and better at engaging consumers on digital channels and on social channels.”

Tapestry nonetheless sees brick-and-mortar areas enjoying a key function even with its on-line development, mentioned Crevoiserat, who grew to become everlasting CEO in October. She’d been serving as interim since July.

‘We assume shops are nonetheless essential, and we’ll proceed to innovate in our shops,” she said. “We have raised our expectations round productiveness and profitability for our retailer fleet, however we predict that bodily contact level, that manifestation of the model in a bodily means, is essential for customers.”

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