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Coach Parent Tapestry to Cut More Jobs as Losses Widen

By Rich Duprey – Apr 30, 2020 at 10:47AM

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But the luxury goods retailer will begin opening North American stores starting tomorrow.

Luxury nameplate Tapestry (TPR -1.59%) reported a wider-than-expected fiscal third-quarter loss as the COVID-19 pandemic forced the closure of 90% of its stores. 

To cope with the decline, the owner of handbag makers Coach and Kate Spade and high-end shoemaker Stuart Weitzmann said it would be firing more employees, both at the corporate and retail level.

Chairman and CEO Jide Zeitlin said in a statement, "We are taking aggressive actions to assure that Tapestry emerges a strong company when conditions normalize."

Different colored leather handbags

Image source: Coach.

An across-the-board decline

Revenue for the quarter tumbled 19% to $1 billion, leading to net losses of over $677 million, or $2.45 per share, compared to profits of $0.40 per share a year ago. Adjusting for one-time items, Tapestry reported a loss of $0.27 per share, down from profits of $0.42 per share last year and coming in dramatically below Wall Street's expectations of just a $0.02 per-share loss.

Sales for the Coach brand fell 20% year over year, but that led to operating income plummeting 84%. Kate Spade sales were down just 11%, but it swung to a loss of $91 million versus a $7 million profit last year. And Stuart Weitzmann sales fell 40%, but the brand also reported a massive $531 million loss compared to last year's $14 million loss.

Tapestry said most of its stores in China have reopened, but business, while improving, is still sparse. It intends to begin reopening its North American stores on May 1 as state and local stay-at-home orders allow, starting with 40 stores.


Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tapestry. The Motley Fool has a disclosure policy.

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