00:00Give us a pulse check. How is the luxury market doing right now?
00:03It saw a little bit of a pickup, but we all know that the spending by Chinese households is depressed.
00:09What are you seeing?
00:11That absolutely is correct. The market remains challenging.
00:15We have seen some gradual improvement over the past few quarters,
00:21primarily driven by all the policies from the government to push consumption.
00:30Is it working, do you think? Is it giving confidence for people to spend more on more luxury items
00:37rather than go for cheaper alternatives, the dupes or the ping-ti? You know these trends.
00:42Well, I would say consumers are very smart and they are very cautious with their spending.
00:48So while overall traditional luxury remains challenging, we see brands like ours winning in this market.
00:58China is our second largest market after the U.S. and we are coming out from very strong quarters of growth.
01:08How is the brand equity right now of the made or, excuse me, designed in America brand equity?
01:15Obviously, we've just come through very turbulent times with tariffs and anti-U.S. sentiment and all that.
01:22How do you weather that and how are you seeing people willing to buy an American brand?
01:27I'd say people look at the story behind the brand.
01:32So what we focus at Tapestry is making sure that we deepen our connection with consumer.
01:39We have a strong focus on Gen Z.
01:41So one of our key priorities is to understand how we can be part of their daily lives and that's how we want to connect with them.
01:50So we take it away from being an American brand.
01:54It's more about the values that we want to provide to the consumer.
01:59We are a New York-based brand.
02:01We focus on product innovation.
02:04We focus on compelling stories.
02:06We focus on building emotional connection with consumer and our target audience, which is Gen Z, is responding to that.
02:15That's why I think our growth trend and our recent trends on new acquisition, on sales, are showing an inflection and an acceleration in this market.
02:27Are you cautiously optimistic then this peace between the U.S. and China can last and removes that uncertainty?
02:35Now, I know you don't make your bags and your products in China.
02:39So overall, what has been the impact of tariffs on confidence and your business?
02:46So last week in Pusan, we saw the president shaking hands.
02:51I think that to me is a sign of confidence.
02:54I believe that they will figure out good ways to partner.
02:59Of course, we want to stay cautious, but so far we don't see too much of an impact in this market.
03:07We have a very diversified supply chain as well.
03:11So we are taking our actions to make sure that we protect ourselves.
03:19But at the same time, seeing the leaders getting together, opening themselves to conversations, is a promising signal.
03:30I read some comments recently from October, I think from Tapestry CEO.
03:34Is it Todd Kahn?
03:36Yes.
03:36He essentially said, in this tariff environment, he's more happy to be in the $300 to $600 range than the $3,000 range.
03:44I'm not saying you're an inexpensive brand, but are you, for this economy right now, in sort of the sweet spot?
03:51And you mentioned Gen Z.
03:53Yes.
03:53Your sales are really driven by influencers and that Gen Z who like your brand.
03:59So would you say you're in that sweet spot?
04:01Yes.
04:02So for us, it's meeting the consumer where they are with the right product assortment and the right price point.
04:10So we don't have the ambition to sell expensive brands that they may not want to carry because they are too precious.
04:20As I mentioned earlier, our objective is tapping into their life, providing the right functionality, but really the right products.
04:29And beyond that, making them feel confident.
04:32How is Singles Day doing?
04:34I mean, it's a period now.
04:35It's not just one day on November 11th.
04:36It has become, you know, a month.
04:40So single days, 11-11 is huge.
04:43Of course, a lot of customers are buying.
04:47Still, there is a lot of buy, buy, buy.
04:50That's the key of double 11.
04:52We have a strong presence on online platform and we are making sure that we are driving the right sales and the right activities.
05:00Is it better than last year?
05:02Yeah.
05:02It's growing.
05:04So we've seen an inflection on sales.
05:06I would say the whole market for coaches outperforming last year's sales.
05:13So it's beyond double 11.
05:15Double 11 is a point in time that we want to win, but overall the growth is quite promising.
05:22Yeah.
05:23So it's beyond double 11.
05:23It's the end user's minus 1.
05:24So we've seen, repeat, have a good three years.
05:25Yeah.
05:26So we've seen an inflection on sales.
05:27It's almost basically three months down as short long customer service will, which is quite getting good at every minute.
05:31So if you guys are looking for that, you know, what's going to do, possibly two days after the recession and a half year have a huge fee to ruin, just one day on the card and a half year.
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