The owner of the Coach and Kate Spade brands is poised for a potential boost to sales if Chinese consumers begin to travel abroad more.
(Bloomberg) — The owner of the Coach and Kate Spade brands is poised for a potential boost to sales if Chinese consumers begin to travel abroad more.
“It will be a tailwind when it happens,” Tapestry Inc. Chief Executive Officer Joanne Crevoiserat said in an interview after the company reported quarterly earnings.
Tapestry’s revenue in China jumped 20% in the quarter ended April 1, and executives forecast mid-single-digit sales growth in the region in the current quarter — helping to drive a more optimistic outlook for the full fiscal year. China generates around 15% of Tapestry’s revenue.
The new outlook doesn’t assume a resumption of international travel by Chinese consumers, Crevoiserat said. Before the pandemic, Chinese travelers generated an important part of sales at Tapestry and other high-end companies based in the US and Europe.
While some of that demand shifted to domestic sales in China during Covid-19 restrictions, many brands are still waiting to see if Chinese consumers’ pre-pandemic travel and spending patterns return.
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