Tapestry ($TPR) owns three well renown names in the world of fashion (Coach, Stuart Weitzman, and Kate Spade). But all of them are in danger of mass layoffs and furloughs if stores around the country don't open by the end of May. Store associates, assistant managers, and potentially other positions are being sacrificed in the name of reopening stores, effective April 25th.
After this decision hit the press yesterday, we decided to look into the last few months of data on Tapestry. Job openings have been in decline for a month now, and as many other retail brands are learning, it's a bad time to be selling anything through brick and mortar during a global pandemic.
Hiring is down at Tapestry 7% since February 1st, and we believe that this trend will continue as thousands are either furloughed or outright let go by the company. If there's a struggle to cut costs, there might also be a plan to be even more aggressive with e-commerce.
Coach.com, for instance, cycles out its inventory a ton, averaging discounts of nearly 50% on thousands of items year-round. If there are fewer workers and fewer stores open, online shopping for Tapestry brands should be a major point of contention for the company going forward. We say 'should' because, despite the fact that stores have been closed for a while, online inventory hasn't shot up. Is there a strategy in place for transitioning from the in-store experience to quarantine shopping?
There was a flash sale on Coach bags back in March, but that was around the same time stores were still open and hiring was normal. A month later, we can't really tell if Tapestry is aware of the opportunity to lean into ordering online. Beauty products are thriving despite stores being closed, there's no reason that handbags can't still sell well. People will go outside eventually.
There has been very little fluctuation in the number of employees at any Tapestry brand, but that is set to change as 2,100 workers lose their jobs later this week. Jide Zeitlin, Tapestry's CEO and Chairman, along with the board of directors will all see their salaries be cut in half.
In fact, all corporate employees in North America will see pay cuts of anywhere between 5 and 20%. This all includes no bonuses going forward. More information will be available at Tapestry's earnings call on the 30th, which we will cover and update you on how things are going with hiring and employee count.
About the Data:
Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales, and app ratings - and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.