Coach Plans to Delist In Hong Kong

Coach Group, which has just changed its name to Tapestry, plans to withdraw its capital market from Hong Kong. COACH (06388.HK) announced recently that it has applied to the Stock Exchange for withdrawing the listing of Hong Kong ADSs.

Subject to approval, Hong Kong ADR is expected to become effective on March 2, 2018 and will cease trading after it closes on January 30, 2018. Tapestry Group issued a statement on November 1 announcing its intention to apply for the withdrawal of a Hong Kong Depositary Receipt issued in Hong Kong to withdraw from the Main Board of the Stock Exchange due to the low trading volume and the concentration of resources on the NYSE listed as the first place of listing. city.

Since the Group has now become a multi-brand group with three independent brands, including Coach, Kate Spade and Stuart Weitzman, the group changed from "Coach" to "Tapestry" last month with Chinese meaning "tapestry" and the Group's stock code Also officially changed from "COH" to "TPR". The Group believes the new name will better convey creativity, craftsmanship, authenticity and inclusiveness to consumers and will provide more possibilities for the Group's future acquisitions.

Tapestry Group's sales soared 24% YoY to US $ 1.29bn in the first quarter ended Sept. 30, with a gross margin of 59.3% and operating profit of 4% to US $ 16.9mn, while net profit increased from a year earlier The $ 6 million soared 3.5 times to $ 21 million. Although Tapestry Group recorded a significant increase in its overall sales, its core brand Coach's sales fell 3% YoY to 924 million U.S. dollars while global same-store sales fell 2%. Its operating profit was 198 million U.S. dollars with a gross profit margin of 68.4%.

In its earnings report, the group said Coach's results for the period were mainly affected by disasters such as hurricanes in North America and typhoons in Asia. Newly acquired Kate Spade recorded a sales of $ 269 million, same-store sales fell 9%, operating loss of $ 135 million, gross profit margin of 61.3%. The earnings report said the brand's performance was mainly affected by measures such as reducing e-commerce channel promotional products and trying to sell more full-price products, leading to higher-than-expected inventory levels before the holiday season. Analysts had expected the Kate Spade same-store sales to decline about 8.8%. Stuart Weitzman, a designer footwear brand, performed well with sales up 10% YoY to $ 96 million and operating profit of $ 8.4 million with a gross profit margin of 58.1%.

For the 2018 fiscal year, Tapestry Group expects sales to grow by 30% to $ 58 or $ 59 billion with Kate Spade's blessing, with sales from Kate Spade expected to exceed $ 1.2 billion and operating profit at 22% % To 25%.

Some analysts pointed out that the light luxury industry outbreak of the acquisition war this year, but perhaps only just begun. After buying Jimmy Choo, Michael Kors Group does not intend to stop. Group CEO John D Idol said at a recent Morgan Stanley global consumer and retail conference that he is actively looking for new acquisitions, emphasizing that he will favor the acquisition of a mature and promising brand but will not disclose the specific detail.

In July, Michael Kors Group (NYSE: KORS) acquired British luxury footwear brand Jimmy Choo for $ 1.2 billion. The deal was officially completed by the end of October. Jimmy Choo has been delisted and is now officially part of the Michael Kors Group. Some analysts said the Michael Kors Group bought Jimmy Choo after the group demonstrated its full access to multi-luxury brand group's determination. In the recent three months, Michael Kors Group's stock price has increased by 32% cumulatively, Tapestry Group has almost no growth, before and after the market capitalization of 8.8 billion and 11.8 billion US dollars respectively.