Tapestry CEO Joanne Crevoiserat told CNBC on Thursday that the company was seeing an increase in demand for a heart-shaped Kate Spade bag that went viral on TikTok last month.
“We were able to take advantage of it. The bag was sold out. We refilled it. We’re learning how to engage that community better and better,” Crevoiserat said in an interview on ‘Closing Bell’, after the dealer reported better than -Expected earnings for its holiday quarter earlier in the day.
Crevoiserat’s comments provide another example of potential social media platforms such as TikTok for Tapestry and other consumer brands. It seems that its influence also stretches categories. For Tapestry, the increasingly popular app boosted sales for its crossbody heart bag, while toy businesses also saw sales growth during the pandemic.
TikTok’s potential for branding is perhaps best illustrated by Walmart’s decision to pursue a minority stake in the app’s U.S. operations. The agreement, first announced in September, remains pending. But in October, Walmart CEO Doug McMillon outlined TikTok’s appeal to the retail giant in a CNBC interview.
“If you’re watching a TikTok video and someone has a garment or item on it that you really like, what if you could just buy it fast?” McMillon then said on “Squawk Box.” “This is what we see happening in countries around the world. And it’s interesting to us, and we want to be a part of it.”
Tapestry shares closed 4.6% higher on Thursday to $ 36.18 apiece after the company beat Wall Street forecasts on the top and bottom line in New York. Although quarterly sales of $ 1.69 billion decreased by 7% compared to a year earlier, it reported a three-dimensional increase in digital sales worldwide. In addition to Kate Spade, Tapestry owns the brand Coach and Stuart Weitzman.
The company’s share has been up more than 160% since the beginning of August and reached a new 52-week high during Thursday’s session.
Crevoiserat said it was very pleased with how Tapestry was expanding its e-commerce operations during the pandemic, as consumers stayed home and did more online shopping. The company’s $ 1.3 billion in online sales over the past twelve months are “more than double what we were a year ago,” she said. “We’ve had the capabilities and we’re getting better and better at engaging consumers in digital and social channels.”
Tapestry still sees brick-and-mortar locations play a key role, even with online growth, said Crevoiserat, who became permanent CEO in October. She has been serving as an interim since July.
“We think stores are still important, and we will continue to innovate in our stores,” she said. ‘We have raised our expectations about productivity and profitability for our shopping park, but we think that the physical touch point, the manifestation of the brand in a physical way, is important for consumers. ‘