00:00Thank you for having us here in your tabby bag booth here at CIIE.
00:04Give us a pulse check. How is the luxury market doing right now?
00:07It saw a little bit of a pickup, but we all know that the spending by Chinese households is depressed.
00:13What are you seeing?
00:15That absolutely is correct. The market remains challenging.
00:20We have seen some gradual improvement over the past few quarters, primarily driven by all the policies from the government to push consumption.
00:34Is it working, do you think? Is it giving confidence for people to spend more on more luxury items rather than go for cheaper alternatives, the dupes or the ping-ti? You know these trends.
00:46Well, I would say consumers are very smart and they're very cautious with their spending.
00:53So while overall traditional luxury remains challenging, we see brands like ours winning in this market.
01:03China is our second largest market after the U.S. and we're coming out from very strong quarters of growth.
01:12How is the brand equity right now of the made or, excuse me, designed in America brand equity?
01:20Obviously, we've just come through very turbulent times with tariffs and anti-U.S. sentiment and all that.
01:26How do you weather that and how are you seeing people willing to buy an American brand?
01:30I'd say people look at the story behind the brand.
01:36So what we focus at Tapestry is making sure that we deepen our connection with consumer.
01:43We have a strong focus on Gen Z.
01:46So one of our key priorities to understand how we can be part of their daily lives.
01:51And that's how we want to connect with them.
01:55So we take it away from being an American brand.
01:58It's more about the values that we want to provide to the consumer.
02:03We are a New York-based brand.
02:06We focus on product innovation.
02:08We focus on compelling stories.
02:11We focus on building emotional connection with consumer.
02:14And our target audience, which is Gen Z, is responding to that.
02:20That's why I think our growth trend and our recent trends on new acquisition, on sales,
02:27are showing an inflection and an acceleration in this market.
02:32Are you cautiously optimistic then this peace between the U.S. and China can last and removes that uncertainty?
02:40Now, I know you don't make your bags and your products in China.
02:43So, overall, what has been the impact of tariffs on confidence and your business?
02:50So, last week in Pusan, we saw the president shaking hands.
02:55I think that, to me, is a sign of confidence.
02:58I believe that they will figure out good ways to partner.
03:04Of course, we want to stay cautious.
03:06But so far, we don't see too much of an impact in this market.
03:11We have a very diversified supply chain as well.
03:16So, we are making, we are taking our actions to make sure that we protect ourselves.
03:23But at the same time, seeing the leaders getting together, opening themselves to conversations is a promising signal.
03:34I read some comments recently from October, I think, from Tapestry CEO.
03:38Is it Todd Kahn?
03:40Yes.
03:40Who essentially said, in this tariff environment, he's more happy to be in the $300 to $600 range than the $3,000 range.
03:48I'm not saying you're an inexpensive brand.
03:51But are you, for this economy right now, in sort of the sweet spot?
03:56And you mentioned Gen Z.
03:57Yes.
03:57Your sales are really driven by influencers and that Gen Z who like your brand.
04:03So, would you say you're in that sweet spot?
04:05Yes.
04:06So, for us, it's meeting the consumer where they are with the right product assortment and the right price point.
04:15So, we don't have the ambition to sell expensive brands that they may not want to carry because they are too precious.
04:24Because, as I mentioned earlier, our objective is tapping into their life, providing the right functionality, but really the right products, and beyond that, making them feel confident.
04:36How's Singles Day doing?
04:38I mean, it's a period now.
04:39It's not just one day on November 11th.
04:40No, it has become, you know, a month.
04:44So, single days, 11-11 is huge.
04:46Of course, a lot of customers are buying.
04:52Still, there is a lot of buy, buy, buy.
04:54That's the key of double 11.
04:57We have a strong presence on online platform, and we are making sure that we are driving the right sales and the right attitude.
05:04Is it better than last year?
05:06Yeah.
05:07It's growing.
05:08So, we've seen an inflection on sales.
05:10I would say the whole market for coaches outperforming last year's sales, so it's beyond double 11.
05:19Double 11, it's a point in time that we want to win, but overall, the growth is quite promising.
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