Coach CEO talks widening Tapestry’s fulfilment capabilities in the US

Expansion has been in the air at Tapestry throughout 2023. In August, it was revealed that the luxury group’s family was to be welcoming more members as it snapped up fellow rival Capri Holdings and its slew of premium brands – namely Michael Kors, Versace and Jimmy Choo. And it wasn’t just the portfolio that grew.

Earlier this month, Tapestry unveiled a new full-scale Fulfilment Centre in North Las Vegas, Nevada, a facility that complements its centre in Jacksonville, Florida, while aiming to better serve customers on the West Coast. Its opening came as Tapestry looked to position itself for the future, well aware of its renewed need to sustain multi-brand fulfilment in light of its notable evolution.

Speaking to FashionUnited, Todd Kahn, the chief executive officer and brand president of one of Tapestry’s central brands Coach, elaborated: “As Tapestry grew, we saw a need to develop our service centre. Our Jacksonville facility had been the primary fulfilment centre since 1995, and as we entered the pandemic era and saw tremendous growth in demand from our digital business, we saw an opportunity to expand our overall operational capacity to best meet the needs of our customers.”

The centre’s mission is primarily to strengthen the company’s omnichannel capabilities, particularly in the way of enhancing distribution. For both retail and e-commerce, for example, the facility is expected to distribute an annual 22.2 million units, while further holding four million units of inventory.

‘Consumer centricity’ at heart of opening

Coach’s Kahn added: “This project was larger than just building the new Las Vegas facility – it became an entire shift in Tapestry’s business practices and a shift in how we look at our fulfilment operations. Having multiple nodes across the US now, our operations have changed from a planning and allocation perspective, and will allow us to house multiple brands under one roof.”

At the core of the scheme is Tapestry’s commitment to “consumer centricity”. This is evidenced by the facility’s close proximity to the affluent areas of the West Coast, where the hope is that customers will be better catered to following what Kahn said was an “increase in demand from [the company’s] digital business during the pandemic”. Its location will reduce inbound and outbound transportation, according to the executive, decreasing delivery windows from five to seven days to two to three days.

Tapestry’s emphasis on this area falls alongside a modest financial bounce back in North America. While other luxury conglomerates continue to take blows from dampened consumer confidence and slashed budgets, for the first quarter of FY24 Tapestry delivered nearly in-line revenues in the region, despite what it said was a “tough” and “difficult” consumer environment.

Company culture and ESG factors

It isn’t just consumers that play a definitive role in the centre’s existence. According to Tapestry, the facility is expected to add over 400 full-time jobs by 2029, a mission that it said only reinforces its “dedication to investing in employees and community”. Such a mindset was further backed by Kahn, who commented: “The incredible team we are assembling reflects the culture of this company and our commitment to investing in the North Las Vegas community as we look forward to growing together for many years to come.”

As such, the opening reflects the efforts of two pillars – Our People and Our Communities – in Tapestry’s Corporate Responsibility Strategy. This annual report, initially introduced in 2013 as a sustainability-focused publication, outlines the achievements and future goals of the company as a whole, including details on supply chain efforts and workforce development. Meanwhile, the third pillar, Our Planet, naturally linked to the topic of sustainability, lays out the goals that Tapestry suggested were built to create a more responsible business model.

Many of these goals are already ingrained into the foundations of the Las Vegas fulfilment centre, as noted by Kahn, who said the group was “consistently analysing [its] environmental footprint across emissions, water use and waste, and renewable energy adoption” towards a more resilient supply chain.

One of the company’s central goals in this area, for example, is to reduce water usage by 10 percent across its own operations from a 2018 baseline and through its supply chain from a 2020 baseline by 2025. With this goal in mind, Kahn noted that the new Fulfilment Centre utilises “innovative landscaping to minimise water usage”, meanwhile further missions are addressed through the integration of energy efficient lighting and electric vehicle charging stations.

Looking to the future, the next steps for Tapestry remain to be drawn up. With its acquisition of Capri set to close some time towards the end of 2024, the group is also projecting a more positive financial outlook for the fiscal year, with revenue expecting to see a slight increase to 6.7 billion dollars. When asked if there were any future plans or potential expansions on the horizon to support such growth, Kahn concluded: “While we do not have specific plans to share, we are constantly improving our supply chain processes and systems to make sure we’re moving at the speed of the consumer.”