Tapestry CEO Joanne Crevoiserat told CNBC on Thursday that the company saw an increase in demand for a heart-shaped Kate Spade bag that went viral on TikTok last month.
“We managed to capitalize on this. The bag ran out. We got it back. We’re learning how to engage the community better and better,” Crevoiserat said in an interview with Closing Bell after the retailer reported better. than -expected earnings for his holiday quarter earlier in the day.
Crevoiserat reviews provide another example of potential social platforms such as TikTok for Tapestry and other consumer brands. Its influence also seems to extend to categories. For Tapestry, the increasingly popular application generated sales for the crossbody heart bag, while toy companies also saw an increase in sales related to TikTok during the pandemic.
The potential of TikTok for brands is probably best exemplified by Walmart’s decision to pursue a minority share in the US operations of the application. The agreement, first announced in September, is pending. But in October, Walmart CEO Doug McMillon detailed TikTok’s attraction to the retail giant in a CNBC interview.
“If you’re watching a TikTok video and someone has a piece of clothing or an item you really like, what if you could buy that item quickly?” McMillon then told Squawk Box. “That’s what we see happening in countries around the world. And it’s interesting for us and we’d love to be a part of it.”
Upholstery shares closed 4.6% on Thursday, up $ 36.18 each, after the New York company exceeded Wall Street forecasts on the top and bottom lines. Although quarterly sales of $ 1.69 billion fell 7% from a year earlier, it reported a three-digit increase in global digital sales. In addition to Kate Spade, Tapestry owns the Coach and Stuart Weitzman brands.
The company’s shares have risen more than 160% since early August and hit a record 52 weeks during Thursday’s session.
Crevoiserat said she was pleased with the way Tapestry expanded its e-commerce operations during the pandemic, as consumers stayed home and shopped more online. The company’s $ 1.3 billion online sales in the last 12 months are “more than double what we were a year ago,” she said. “We have had the capabilities and we are becoming better and better at involving consumers on digital and social channels.”
The upholstery still sees brick locations playing a key role even with its online growth, said Crevoiserat, who became permanent CEO in October. It had been in operation since July.
“We believe that stores are still important and we will continue to innovate in our stores,” she said. “We have raised expectations in terms of productivity and profitability for our store fleet, but we believe that the physical point of contact, that manifestation branding in a physical way is important for consumers. ”