Dive Brief:
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Tapestry on Thursday said that Todd Kahn, who has been serving as interim CEO at its Coach brand since last July, has the job permanently, effective immediately.
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Kahn took over upon the abrupt departure of Tapestry CEO Jide Zeitlin, who had also been leading Coach. Kahn has been with the company since 2008 in various leadership roles, and will report directly to Tapestry CEO Joanne Crevoiserat.
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The decision helps wrap up a period of turmoil for the organization. Even before Zeitlin's exit, Tapestry was shaking up its C-suite amid the challenges presented by the pandemic, with Coach chief Joshua Schulman leaving and new leadership at the Kate Spade and Stuart Weitzman labels early last year.
Dive Insight:
Coach remains a prime example of successful brand rehabilitation: After years of a watered down reputation that kept downward pressure on prices, Coach is firmly back in the luxury space.
One tactic that helped the brand achieve that is what BMO Capital Markets Managing Director Simeon Siegel calls its "shrink to grow" approach, especially when it comes to department stores. In fiscal year 2020, wholesale was 8% of Coach's channel mix, with less than half of it in U.S. department stores, Siegel said in a recent client note. The brand has also reduced its number of SKUs in an effort to protect margins and help with "clarifying the brand messaging," Siegel noted.
The pandemic disrupted Tapestry's planning somewhat, and, with 13 years at the company, Kahn represents stability. "Todd has done a tremendous job leading Coach over the last nine months, delivering exceptional business results, while effectively navigating the pandemic," Crevoiserat said in a statement.
Thanks to its elevated brand, however, the company is fairly well positioned at the moment. With the pandemic ongoing and lower-income consumers and the economy still dependent on government support, luxury is emerging as a well-protected segment. Prices have actually risen: Most luxury handbags are now priced between $2,000 and $2,500, above 2019's prevailing $1,500 to $2,000 range, according to data from market intelligence platform Edited. "However, the $500 or lower interval has also grown, paving the way for affordable It bags inspired by Coach's Pillow Tabby or Telfar's Medium Shopping Bag," according to that report.
