Tapestry has struggled with brand performance and reported an $855 million write-down on Kate Spade. The decline in expected cash flows and ongoing investments prompted the write-down, while Kate Spade's sales fell 10% last year, totaling nearly $1.2 billion. Tapestry acquired Kate Spade for $2.4 billion eight years ago but has seen little success since. Scott Roe, CFO, stated that despite demand for the brand, execution has been lacking. Tapestry aims to compete with European fashion giants, having renamed from Coach Inc. in 2017.
Tapestry reported an $855 million write-down on Kate Spade due to declines in expected cash flows and ongoing investments, highlighting struggles in brand turnaround.
Sales at Kate Spade dropped 10% last year, with revenues in the fiscal year at approximately $1.2 billion, well below the peak of $1.5 billion three years ago.
Scott Roe, Tapestry's CFO, claimed that while demand for Kate Spade remains strong, poor execution has hindered the brand's growth in recent years.
Tapestry aimed to position itself as a competitor to European giants LVMH and Kering, renaming from Coach Inc. to reflect a broader brand vision.
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