Are you buying a coach or Kate Spade handbag anytime soon? You’re not alone as revenue per handbag has risen globally more than 25 percent for the first quarter.
According to quarterly reports from Tapestry, the parent company of Coach and Kate Spade, women are spending more money when shopping for handbags during the pandemic. Interestingly enough, younger purse consumers are spending less on handbags than ever before.
Tapestry explained in their quarterly report that much of these gains came from its decision to cut back on promotions and focus on selling more items at a higher price.
Chief Executive Joanne Crevoisert told analysts, “We’re focused on driving (average unit revenue) by being close to our consumer and delivering products that our consumers value.”
As a result, the company has eschewed its relationship with many distributors like department stores, instead focusing on building relationships with customers by enhancing their online shopping options.
According to the report, overall sales for the company seem to be on the decline largely due to the coronavirus pandemic and fewer consumers needing purses as many employees work from home.
The company’s net sales totaled $1.17 billion, a 14 percent decline from the previous year when sales were $1.36 billion. Sales for Coach products totaled $875 million, a nine percent decline from the past year’s $966 million.
Kate Spade’s product net sales saw a steeper decline of 21 percent, which it credited to a pullback in lower margin wholesale distribution. In the first-quarter net sales were $240 million compared to $206 million in the year prior.
Stuart Weitzman, a shoe company under the Tapestry brand, reported the steepest decline of 35 percent. The company made $56 million in net sales for the first quarter compared to $87 million in the past year.