Like the rest of the retail industry, Tapestry (NYSE:TPR), the parent company of luxury goods brands Coach, Kate Spade, and Stuart Weitzman, has had to close stores and shore up cash as it attempts to fulfill its customers' needs through digital means. It announced on April 20 that all mainland China stores have now reopened, which gives the company a potentially renewed source of revenue to keep operations going.
A stronger approach
While Tapestry has made similar adjustments to its business as other retailers, the company's initiatives have been quite broad. Over the course of the COVID-19 pandemic, it has taken all of these actions and more:
- Working to reduce fixed costs and third-party services.
- Reflowing late spring and early summer inventories and canceling late summer and early fall productions.
- Canceling new store openings and investing in high-return projects such as digital.
- Continuing to pay most sales associates through May 30. If stores are not reopened by that time some associates may be furloughed.
- Reducing its North American retail workforce by 2,100 part-time workers with a $1,000 payment to ease the financial burden.
- Cutting compensation for the board of directors and CEO.
- Cutting salary by 5% to 20% for corporate employees above a certain payment threshold.
- Canceling or suspending bonuses and salary increases.
Now that stores are reopening in China, Tapestry is aggressively working to bring in revenue. China is an important revenue driver: In the company's second quarter, growth in that region outpaced North American sales growth.
Tapestry's other main focus is vigorously sharpening its e-commerce platform and leveraging it across global markets as consumers turn toward digital.