Tapestry CEO Joanne Crevoiserat told CNBC on Thursday that demand for a heart-shaped Kate Spade bag, which went viral on TikTok last month, had skyrocketed.
“We were able to use that. The bag was sold out. We refilled it. We are learning how we can always better involve this community,” said Crevoiserat in an interview on “Closing Bell” after the retailer had reported better than expected Profit for the vacation quarter earlier in the day.
Crevoiserat’s comments are another example of the potential social media platforms like TikTok for Tapestry and other consumer brands. Its influence also seems to expand categories. For Tapestry, the increasingly popular app boosted sales of its shoulder bag, while toy companies also saw sales growth related to TikTok during the pandemic.
TikTok’s branding potential is best illustrated by Walmart’s decision to pursue a minority stake in the app’s U.S. operations. The deal, first announced in September, is still pending. In October, Walmart CEO Doug McMillon explained TikTok’s appeal 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 on it that you really like, what if you could just and quickly purchase that item?” McMillon then said on “Squawk Box”. “This is what we see in countries all over the world. And it fascinates us and we want to be part of it.”
Tapestry stock closed Thursday 4.6% to $ 36.18 apiece after the New York-based company beat Wall Street’s profit and loss projections. Despite quarterly revenue of $ 1.69 billion, down 7% year over year, the company saw a triple-digit increase in digital revenue worldwide. In addition to Kate Spade, Tapestry owns the brands Coach and Stuart Weitzman.
The company’s stock is up more than 160% since early August, hitting a new 52-week high on Thursday.
Crevoiserat said she was happy with how Tapestry expanded its e-commerce activities during the pandemic, as consumers stayed at home and made more purchases online. The company’s online sales of $ 1.3 billion in the past 12 months are “more than double what it was a year ago,” she said. “We had the skills and are getting better and better at engaging consumers on digital and social channels.”
At Tapestry, brick-and-mortar locations continue to play an important role despite online growth, said Crevoiserat, who became permanent CEO in October. She had served as an interim since July.
“We think business is still important and we will continue to innovate in our stores,” she said. “We have raised our expectations for productivity and profitability for our business fleet, but we think that physical touch point, this physical manifestation of the brand is important to consumers.”