Joanne Crevoiserat, Tapestry’s CEO, told CNBC on Thursday that the company saw demand for a heart-shaped Kate Spade bag soaring that went viral on TikTok last month.
“We were able to take advantage of that. The bag was sold out. We replenished it. We are learning how to better involve that community,” Crevoiserat said in an interview on “Closing Bell,” after the retailer received better-than-expected earnings for the holiday quarter earlier in the day.
Crevoiserat’s comments are another example of the potential social media platforms like TikTok representing for Tapestry and other consumer brands. Its influence also seems to stretch categories. For Tapestry, the increasingly popular app fueled sales of its crossbody pericardium, while toy companies also saw revenue growth during the pandemic related to TikTok.
TikTok’s potential for brands is perhaps best illustrated by Walmart’s decision to acquire a minority stake in the app’s US operations. The deal, first announced in September, remains pending. But in October, Doug McMillon, CEO of Walmart, gave the appeal of TikTok to the retail giant in a CNBC interview.
“If you’re watching a TikTok video and someone has a piece of clothing or an item that you really like, what if you could just buy that item quickly?” McMillon then said on “Squawk Box.” “That’s what we see happening in countries around the world. And it intrigues us and we want to be a part of it.”
Tapestry shares closed 4.6% higher on Thursday to $ 36.18 each after the New York-based company beat Wall Street forecasts on the top and bottom lines. Although its quarterly revenue of $ 1.69 billion was 7% lower than a year earlier, it reported a three-fold increase in digital sales worldwide. In addition to Kate Spade, Tapestry owns the Coach and Stuart Weitzman brands.
Shares of the company are up more than 160% since the beginning of August, setting a new high in 52 weeks during Thursday’s session.
Crevoiserat said she was happy with the way Tapestry expanded its e-commerce business during the pandemic as consumers stayed home and shopped more online. The company’s $ 1.3 billion online sales in the past 12 months are “more than double what we were a year ago,” she said. “We’ve had the opportunity and we’re getting better at engaging consumers on digital and social channels.”
Tapestry still sees physical locations playing a key role, even with online growth, said Crevoiserat, who became permanent CEO in October. She has served as an interim since July.
“We think stores are still important, and we will continue to innovate in our stores,” she said. “We’ve raised our expectations in terms of productivity and profitability for our retail stock, but we think that that physical touchpoint, that manifestation of the brand in a physical way, is important to consumers. ”