Coach’s parent company Tapestry Group plans to place the headquarters for its China travel retail business in Hainan. Moreover, Coach Fragrance, which was represented and operated by Chinese company Eternal, even saw a year-on-year increase of over 120% in turnover in just two days during the presale of Double 11, Chinese Shopping Carnival, in 2021.
Tapestry Group, which owns the Coach, Kate Spade and Stuart Weitzman brands, is all set to place the headquarters for its China travel retail business in Hainan.
New York-listed Tapestry formally signed a strategic cooperation agreement with the Hainan Provincial Bureau of International Economic Development (Hainan IEDB) and a bonded zone committee in Haikou, the capital of the island province, on Tuesday.
Hainan wants to be the center of travel retail and free trade in China. Last year in May, IEDB held the inaugural China International Consumer Products Expo in Haikou, which attracted over 1,500 domestic and foreign companies from around 70 countries. Exhibitors included a host of luxury brands including some big names like Burberry, De Beers, L’Oréal, Shiseido Swarovski, Swatch and Tapestry. The event shifted the focus away from Singapore where the duty-free industry usually gathers in the same month for its leading regional show, TFWA Asia Pacific, which was replaced with an online forum last year due to the pandemic.
While Hainan has buoyed travel retail in very hard times, it is now suffering an unforeseen setback. Due to the high Covid case numbers in China and subsequent lockdowns, sales contracted in March after surging by 33% to $2 billion in January and February. The contraction could continue into April given the scale of the outbreak.
Tapestry has already felt the pressure of China’s current economic unpredictability. The company’s fiscal 2022 second quarter results (ending December 2021) showed low-single digit revenue gains in Greater China after booming numbers in previous periods, admittedly against sometimes soft comparisons.
Overall, Tapestry achieved revenue of $2.14 billion during Q2 FY2022, up 27%, of which $1.5 billion came from Coach, $500 million from Kate Spade, and $116 million from shoemaker Stuart Weitzman. The weight of Greater China is now 19% up from 15% in FY2019.
In 2019, Tapestry, Inc. presented at the 2nd China International Import Expo (hereinafter referred to as “the Expo”) with the theme of “Creative Fashion Integration, Exploring the Future Win-Win”, becoming the first American Modern luxury accessories group.
“China is irreplaceable,” said Jide Zeitlin, Chairman and CEO of Tapestry, in a statement. “China is the primary driver of growth in the world economy, thanks to the complementary relationship between technological innovation and cultural empowerment. As an international exchange platform, the Expo is committed to injecting new momentum into the global economy. We look forward to working with more Chinese partners to achieve effective communication and deeper links with global consumers, thus helping China’s great process of innovation and development, and writing a new chapter of more open, innovative and sustainable development together.”
Yann Bozec, President and CEO of Tapestry Group and Coach China, also introduced the highlights of the group’s booth and shared several elements to attract the new generation of consumers: product design that combines heritage and innovation, marketing innovation that breaks the He also shared some of the key elements to attract new generation consumers: product design with heritage and innovation, and marketing innovation that breaks the usual thinking.
Yann Bozec pointed out that Coach has been a pioneer in the digital field in the Chinese market, and was one of the first luxury brands to use platforms such as Weibo and WeChat for digital marketing, “We are now also active in platforms that started a little later, such as Xiaohongshu, to provide better customer service and realize the connection between online and offline. online and offline connections.”
Coach’s cosmetics-related business is fragrance, and its fragrance business is represented and operated in China by Eternal, a leading omni-channel brand management company for beauty products. In July 2017, Eternal launched the first Coach fragrance counter on the mainland in Beijing’s Hanguang Department Store, followed by sequential landings in Shanghai and other locations. At the end of 2017, Coach launched an intense fragrance for women, and in 2018 Coach focused on launching Eau de Toilette for Men and Floral Eau de Toilette. Eternal said Coach aims to enter the top five in the fragrance market share chart in 2022. During the promotional campaign on June 18th held by Chinese e-commerce platform Taobal in 2021, Eternal Group helped several brands to exceed 10 million in sales, breaking the sales records of multiple brands on the sales charts of various e-commerce platforms, and Coach even saw a year-on-year increase of over 120% in turnover in just two days from October 31 to November 1 in 2021.