Coach Inc.’s rebrand as Tapestry has created the expected logo change-fueled outrage things of this sort do. But the move may actually be an intelligent way to distance the parent company, which also owns Stuart Weitzman and Kate Spade, from the somewhat tarnished Coach brand name — and create a bland “holding group” identity that remains relatively removed from brand conversations.
“This is about creating some distance from a tainted brand and to create an umbrella organization for the ‘tapestry’ of acquisitions it’s making,” said Paula Rosenblum, managing partner at retail intelligence company RSR Research.
The company announced Wednesday that it will change its name to Tapestry Inc., and its ticker to TPR effective Oct. 31. “In Tapestry, we found a name that speaks to creativity, craftsmanship, authenticity and inclusivity on a shared platform and values,” said CEO Victor Luis in a statement.
But to Jason Goldberg, the senior vp of commerce at the SapientRazorfish agency, maintaining the brands’ distinct identities was the key driver. In fact, consumers won’t hear much about Tapestry after the announcement buzz dies down — and that’s a good thing.
“When you make this announcement that you’re adding this new layer, it becomes confusing — but it makes sense,” he said. “The best example is Google: They created a new entity called Alphabet so that it’s driverless cars are kept separate from its search engine. All of its enterprises are under the Alphabet house of brands, but you won’t see ads for Alphabet.”
In the same way, you won’t see ads for VF Corporation, the largest apparel company in the world, which owns brands including North Face, Timberland and Vans.
“The consumer value proposition is around the individual brands,” said Goldberg. “Those brands have very different personalities that appeal to their unique customers. One brand won’t poorly affect the other because nobody knows they have a connection; consumers don’t know of VF Corporation.”
Coach, Inc. has been in growth mode for the last few years, scooping up luxury footwear brand Stuart Weitzman in January of 2015 (a $524 million deal) and Kate Spade in May (for $2.4 billion). In July, Coach competitor Michael Kors acquired Jimmy Choo, though Coach was rumored to be adding the brand to its growing roster.
While it’s seen its share of highs and lows, Coach, the house’s original brand, has been carrying out an extensive restructuring plan since 2014. Much like that of Michael Kors, it includes cutting back on discount product, and pulling out of department stores and outlets, in the name of winning back brand cachet. It expanded its inventory beyond handbags and leather goods with the launch of a full ready-to-wear line in 2014, and it has been in an apparent bid to win over millennial shoppers, announcing the biggest Instagram star, Selena Gomez, as the face of the brand in December.
Whether the adjustments are working is hard to say, at this point; amid transition, only time will tell. In August, Coach, Inc. released better-than-expected bottom-line results for the fourth quarter of fiscal 2017, with quarterly earnings up 11 percent year over year. However, sales fell short of analyst predictions.
Tapestry has a way to go before reaching the of caliber of French luxury groups Kering (owner of Gucci, Saint Laurent, Balenciaga and Stella McCartney, among others) and LVMH (which boasts a portfolio of 70 brands, including Louis Vuitton, Celine and Christian Dior). But it’s no doubt a contender in the next-in-line circle that has seen holding company Assembled Brands and contemporary conglomerate The Collected Group in recent years.
“They’ve really done their homework, from a perspective of why a house-type of structure works; they’ve done their due diligence and looked at Paris and London fashion houses,” said Chris Paraysz, founder and CEO of PMX Agency. “They’re owning ‘middle luxury.’ Now, the challenge is the continuity of the vision of the brands and merchandise.”
Image via Footwear News