Tapestry CEO Joanne Crevoiserat told CNBC on Thursday that the company experienced an increase in demand for a heart-shaped Kate Spade bag that went viral on TikTok last month.
“We were able to take advantage of it. The bag ran out. We got it back. We’re learning to get this community better and better involved,” Crevoiserat said in an interview with Closing Bell after the retailer reported unexpected gains for the your vacation quarter before the day.
Crevoiserat’s comments offer another example of potential social media platforms like TikTok representing for Tapestry and other consumer brands. His influence also seems to extend the categories. For Tapestry, the increasingly popular app boosted sales of its heart bag, while toy companies also experienced TikTok-related sales growth during the pandemic.
TikTok’s potential for brands is perhaps the best example of Walmart’s decision to pursue a minority stake in U.S. operations in the U.S. The deal, first announced in September, is still pending. But in October, Walmart CEO Doug McMillon detailed TikTok’s appeal to the retail giant in a CNBC interview.
“If you watch a TikTok video and there is someone who has a piece of clothing or item that you really like, and if you could buy it quickly?” McMillon then told “Squawk Box.” “That’s what we’re seeing happening in countries around the world. And it’s intriguing for us and we’d like to be a part of it.”
Shares of Upholstery closed 4.6% on Thursday, up $ 36.18 each, after the New York-based company exceeded Wall Street forecasts on the top and bottom lines. While quarterly sales of $ 1.696 billion fell 7% from a year earlier, it reported a three-digit increase in digital sales globally. In addition to Kate Spade, Tapestry owns the Coach and Stuart Weitzman brands.
Shares of the company have risen more than 160% since early August and recorded a 52-week high during Thursday’s session.
Crevoiserat said she was pleased with how Tapestry increased its e-commerce operations during the pandemic as consumers stayed home and made more online purchases. The company’s $ 1.3 billion online sales over the past twelve months are “more than double what they were a year ago,” he said. “We’ve had the capabilities and we’re becoming more attractive to attract consumers to digital channels and social channels.”
Tapestry continues to see brick and mortar locations play a key role even with its online growth, said Crevoiserat, who became a permanent CEO in October. He had been acting since July.
“We believe stores are still important and we will continue to innovate in our stores,” he said. “We have raised our expectations in terms of productivity and profitability of our store fleet, but we think the physical point of contact, this manifestation of the brand physically is important to consumers.”