Tapestry CEO Joanne Crevoiserat told CNBC on Thursday that the company saw an increase in demand for a Kate Spade heart-shaped bag that went viral on TikTok last month.
“We managed to take advantage of that. The bag ran out. We managed to replenish it. We are learning how to involve this community even better,” said Crevoiserat in an interview with “Closing Bell”, after the retailer reported better than – expected earnings for the holiday quarter earlier in the day.
Crevoiserat’s comments provide another example of the potential of social media platforms as TikTok represents for Tapestry and other consumer brands. Its influence also seems to stretch the categories. For Tapestry, the increasingly popular app boosted sales of its heart crossbody bag, while toy companies also saw sales growth linked to TikTok during the pandemic.
TikTok’s potential for brands is perhaps best exemplified by Walmart’s decision to seek a minority stake in the app’s operations in the United States. The deal, first announced in September, remains pending. But in October, Walmart CEO Doug McMillon detailed TikTok’s fascination with the retail giant in an interview with CNBC.
“If you’re watching a TikTok video and someone has a piece of clothing or an item that you really like, what if you can buy that item quickly?” McMillon then said in “Squawk Box.” “This is what we are seeing happening in countries around the world. And it is intriguing for us, and we would like to be a part of it.”
Tapestry shares closed up 4.6% on Thursday, to $ 36.18 each, after the New York-based company outperformed Wall Street forecasts on the top and bottom lines. Although quarterly sales of $ 1.69 billion were down 7% compared to the previous year, she reported a three-digit increase in digital sales worldwide. In addition to Kate Spade, Tapestry owns the brands Coach and Stuart Weitzman.
The company’s stock has risen more than 160% since the beginning of August and reached a new 52-week record during Thursday’s session.
Crevoiserat said she is pleased with the way Tapestry expanded its e-commerce operations during the pandemic, as consumers stayed at home and made more purchases 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 had the resources and we are getting better at involving consumers in digital and social channels.”
Tapestry still sees physical locations playing a key role, even with its online growth, said Crevoiserat, who became permanent CEO in October. She had been serving as a caretaker since July.
‘We think that stores are still important and we will continue to innovate in our stores, “she said. We have increased our expectations regarding the productivity and profitability of our store fleet, but we believe that this point of physical contact, this manifestation marks a physical form, is important for consumers. ”