Coach (COH) is changing its name to Tapestry (TPR)

• New website:  http://www.tapestry.com
• Effective October 31, 2017, Tapestry’s common stock will trade on the New York Stock Exchange under the symbol TPR.
• The name change, after all, follows Coach’s 2015 acquisition of the Stuart Weitzman shoe label for up to $574 million and its purchase of Kate Spade for $2.4 billion in May. And in July, Coach’s rival Michael Kors acquired Jimmy Choo (a brand that Coach was reportedly also considering acquiring) for $1.2 billion.

    

NEW YORK (AP) — To better incorporate all of the brands it now owns, the storied Coach company of New York is changing its name to Tapestry.

The luxury goods company that came to prominence in the "Mad Men" era now owns brands like Stuart Weitzman and Kate Spade & Co. as well. CEO Victor Luis said Wednesday that the name Tapestry is more inclusive.

Coach acquired Stuart Weitzman in 2015 in a deal valued up to $574 million. It spent $2.4 billion for Kate Spade this year, seeking to broaden its appeal. The Coach brand of bags and other goods is alive and well, but it becomes one of three brands sold by the company that will be called Tapestry.

"We are now at a defining moment in our corporate reinvention, having evolved from a mono-brand specialty retailer to a true house of emotional, desirable brands," Luis said in a company release.

A website with the new name, which becomes official at the end of the month, is up and running.

The change is part of Coach's pursuit of younger shoppers who may not feel the same draw to store windows on Manhattan's 5th Avenue.

Coach began as a small workshop in Manhattan in 1941, and became a fashion powerhouse in the early 1960s though innovate designs.

Coach Inc. will also be changing its ticker symbol on the New York Stock Exchange from "COH," to "TPR." Shares of the company declined more than 2 percent to $39.11 in morning trading.

=Coach (COH) reported earnings on Tue 15 Aug 17 (b/o)

Coach beats by $0.01, misses on revs; guides FY18 EPS below consensus, revs below consensus

• Reports Q4 (Jun) earnings of $0.50 per share, $0.01 better than the Capital IQ Consensus of $0.49; revenues fell 1.8% year/year to $1.13 bln vs the $1.15 bln Capital IQ Consensus. North America Q2 comparable store sales rose approximately 4%
• Co issues downside guidance for FY18, sees EPS of $2.35-2.40 vs. $2.50 Capital IQ Consensus Estimate; sees FY18 revs of $5.8-5.9 bln vs. $6.04 bln Capital IQ Consensus Estimate.
• Co guidance included low-to-mid- single digit accretion from the acquisition of Kate Spade, consistent with the previously communicated forecast.
• In addition, the company is projecting operating income growth of 22% to 25% versus fiscal 2017 driven by mid-single digit organic growth, the acquisition of Kate Spade, and estimated synergies of $30-$35 million. These synergies are expected to offset in part the reduction in profitability from the strategic and deliberate pullback of Kate Spade wholesale disposition and online flash sales channels. Taken together, the Kate Spade business and resulting synergies are expected to contribute approximately $130-$140 million to operating income.

Kate Spade (KATE) to be acquired by Coach (COH) for $18.50/share or $2.4 bln

   

 

Kate Spade agrees to be acquired by Coach (COH) for $18.50/share in cash, or approximately $2.4 bln (KATE) :

Coach (COH) announced it has signed a definitive agreement to acquire Kate Spade & Company. Under the terms of the transaction Kate Spade shareholders will receive $18.50 per share in cash for a total transaction value of $2.4 billion. The transaction represents a 27.5% percent premium to the unaffected closing price of Kate Spade's shares as of December 27, 2016, the last trading day prior to media speculation of a transaction. The transaction has been unanimously approved by the Boards of Directors of Kate Spade & Company and Coach, Inc.

• The combination of Coach, Inc. and Kate Spade & Company will create a leading luxury lifestyle company with a more diverse multi-brand portfolio supported by significant expertise in handbag design, merchandising, supply chain and retail operations as well as solid financial acumen. Coach is focused on preserving Kate Spade's brand independence as well as retaining key talent, ensuring a smooth transition to Coach, Inc.'s ownership.
• The acquisition is expected to be accretive in fiscal 2018 and reach double-digit accretion by fiscal 2019 on a non-GAAP basis
• The transaction is not subject to a financing condition. Coach has secured committed bridge financing from BofA Merrill Lynch. The $2.4 billion purchase price is expected to be funded by a combination of senior notes, bank term loans and approximately $1.2 billion of excess Coach cash, a portion of which will be used to repay an expected $800 million 6-month term loan. The transaction is expected to close in the third quarter of calendar 2017.

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Kate Spade in 2004


Kate with husband Andy Spade and brother David Spade in 2001

Kate Spade and Andy Spade in 2016

Neiman Marcus purchased 56 percent of the company in 1999 and the remaining 44 percent by 2006, at which time Kate left the business to raise her daughter.

Andy continued to work with brands including Target, J.Crew and Warby Parker.

By 2006, the company was valued at $125 million, and Kate left for good the following year after Neiman sold Kate Spade & Co to Liz Claiborne that same year.


In the decade since she sold her ownership Kate Spade has continued to grow, and in 2017 the brand was purchased by Coach for $2.4 billion.

*** charts before acquisition ***

 

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Coach is in the midst of both an image and business makeover. In 2014, Stuart Vevers, formerly of Loewe and Mulberry, was brought in as the brand's new executive creative director, and was charged with emphasizing the brand's history of luxury and establishing he brand as a ready-to-wear clothing player as well. In conjunction, the brand also decided to greatly pull back on the amount of merchandise it sold at midlevel department stores, and put more of an emphasis on its own retail and online sales efforts. Selena Gomez was also brought in as the new face of the brand after singing a deal rumored to be worth $10 million. Indeed, Gomez showed up in a custom Coach gown at last week's Met Gala.

Meanwhile, Coach's business plans now extend beyond its namesake brand. In addition to the Kate Spade acquisition, the company also most recently purchased Stuart Weitzman in January 2015 for $574 million.

Luxury conglomerates are par for the course in Europe. French companies LVMH and Kering combined own a murderer's row of luxury fashion brands, but an American company has never matched that fire power. Sure, PVH Corp. owns both Calvin Klein and Tommy Hilfiger, but their portfolio isn't completely dedicated to luxury. Coach is now quite open about being the first American company to take a page out of that French fashion business playbook and consolidating familiar luxury brands under one ownership group.

=Coach (COH) reported earnings on Tue 2 May 2017 (b/o)

Coach beats by $0.02, misses on revs; reaffirms 2017 guidance :

• Reports Q3 (Mar) earnings of $0.46 per share, $0.02 better than the Capital IQ Consensus of $0.44; revenues fell 3.7% year/year to $995.2 mln vs the $1.02 bln Capital IQ Consensus.
  • As planned, the Company's strategic decision to elevate the Coach brand's positioning in the North American wholesale channel through a reduction in promotional events and door closures negatively impacted sales growth by approximately 150 basis points in the quarter.
  • Gross margin for the quarter expanded 190 basis points from prior year to 70.9% on both a reported and non-GAAP basis.
• Reaffirms 2017 guidance:
  • Continues to expect revenues for fiscal 2017 to increase low-single digits, including the impact of currency (Consensus represents +1% rev growth expectation).
  • Continues to project double-digit growth in both net income and earnings per diluted share for the year (Consensus represents +8% EPS growth expectation)
  • Maintaining operating margin forecast for Coach, Inc. of between 18.5-19.0% for fiscal 2017. This guidance incorporates the negative impact of both Stuart Weitzman and the strategic decision to elevate the Coach brand's positioning in the North American wholesale channel, including a reduction in promotional events and the closure of about 25% of doors.
  • Interest expense is now expected to be in the area of $20 million for the year while the full year fiscal 2017 tax rate is still projected at about 26%.

Coach (COH) reported earnings on Tue 1 Nov 16 (b/o)

** charts after earnings **

 

Coach reports EPS in-line, misses on revs; reaffirms FY17:

• Reports Q1 (Sep) earnings of $0.45 per share, in-line with the Capital IQ Consensus of $0.45; revenues rose 0.7% year/year to $1.04 bln vs the $1.07 bln Capital IQ Consensus. Net sales for the Coach brand totaled $950 million for the first fiscal quarter, an increase of 1% on a reported basis and a decrease of 1% on a constant currency basis. As expected, the strategic actions in the North America wholesale channel impacted sales by about 150 basis points.
  • Total North American Coach brand sales decreased 3% on both a reported and constant currency basis to $545 million.
  • International Coach brand sales rose 7% to $395 million on a reported basis from $369 million last year and 3% on a constant currency basis. Greater China sales were approximately even with prior year in dollars and increased 5% on a constant currency basis driven by double-digit growth and positive comparable store sales on the Mainland offset by continued weakness in Hong Kong and Macau. In Japan, sales rose 11% in dollars and decreased 7% in constant currency impacted by a decline in Chinese tourist spend, lapping last year's dramatic increase.
  • Sales for the remaining directly-operated businesses in Asia rose low-single digits in dollars and constant currency, while Europe remained strong, growing at a double-digit pace.
• Co is maintaining its fiscal 2017 outlook as outlined in August.
  • Co continues to expect revenues for fiscal 2017 to increase by low-to-mid single digits, including an expected benefit from foreign currency of ~100-150 basis points based on current exchange rates. In addition, the Company is maintaining its operating margin forecast for Coach, Inc. of between 18.5-19.0% for fiscal 2017. This guidance incorporates the negative impact of both Stuart Weitzman and the strategic decision to elevate the Coach brand's positioning in the North American wholesale channel, including a reduction in promotional events and the closure of about 25% of doors. Interest expense is still expected to be in the area of $25 million for the year while the full year fiscal 2017 tax rate is projected at about 28%.
  • Taken together, the Company continues to project double-digit growth in both net income and earnings per diluted share for the year (consensus +9.1% to $2.16).

Coach (COH) reported 4Q earnings on Tue 26 Jan 16 (b/o)

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• 3 days later:

Coach beats by $0.02, reports revs in-line; maintains FY16 sales guidance, raises operating income outlook:

• Reports Q2 (Dec) earnings of $0.68 per share, $0.02 better than the Capital IQ Consensus of $0.66; revenues rose 4.5% year/year to $1.27 bln vs the $1.28 bln Capital IQ Consensus. This included a contribution of $13 million or $0.05 per share from Stuart Weitzman.
• Inventory declined 2% on a consolidated basis and 9% for the Coach brand.
• Outlook: COH is maintaining its FY16 constant currency revenue growth and operating margin guidance for the Coach brand, while raising its consolidated operating income outlook based on second quarter results.
  • Coach brand revenues for Fiscal 2016 are still expected to increase by low-single digits in constant currency on a 52-week basis. However, based on current exchange rates, foreign currency is now expected to negatively impact overall Fiscal 2016 revenue growth by 225-250 basis points.
  • Coach brand operating margin for Fiscal 2016 is still estimated to be in the mid-to-high teens with some shift between the gross margin and expense ratio from previous annual guidance. 
  • Overall, the Stuart Weitzman business is now projected to negatively impact consolidated gross margin and operating margin by about 70 basis points and approximately 20 basis points, respectively -- an improvement from previous guidance.
• Taken together with its projection for the Coach brand, the company is raising its operating income outlook for Coach, Inc. for Fiscal 2016.

COH — is it a buy?

• Jan. 21; #37; Is COH a buy?

• 3 days later: NO

 

Long trade : COH +8% (11/15)

• 2 weeks later:

Coach (COH) reported 3Q earnings on Tue 27 Oct 15 (b/o)

** chart before earnings **

** charts after earnings **

 

COH — NR

 

• 3 days later:

Coach (COH) reported earnings Tuesday 31 July 2012

** charts before earnings **

** charts after earnings **

Shares drop 18%
Despite topping sales expectations for fiscal fourth-quarter, shares of high-end leather goods maker Coach Inc. (COH) traded lower after the company described fiscal 2013 as “an investment year” in which it will accelerate the acquisition of domestic-retail operations in key Asian markets, including those in Malaysia and Korea.

Q2 : What's a better buy - COH or NKE ?

A: COH                                                                        B: NKE

 

Answer: check your email of 4/20/11.