After unveiling the company's name-change from Coach Inc (NYSE: COH). to Tapestry (NYSE: TPR), the holding company housing its once-eponymous branch, Kate Spade, and Stuart Weitzman suffered a 2% drop in shares. Tapestry Inc. seeks to "create a broader umbrella" for the high-end brands it encompasses, without sacrificing the iconic connotations of the Coach name, and the luxury handbag line for which it is so well-known. The name change to Tapestry will be official on Halloween.
After this decision was unleashed, the company's worst critics made themselves known through social media, potentially driving the decline in its shares. Many believed the new name had not been selected as carefully as it could've been, and tarnished the lustre of the iconic brand's stash of soft power. Coach was originally founded in 1941, and in its heyday, it was strengthened by the upscale connotations of its most popular product: luxury handbags.
In a sense, these critics are picking up on the brand's decline in recent years. The company has suffered from the combined effects of the recession and the spike in online shopping over retail. In its attempts to survive, the company is now purchasing new brands (such as Kate Spade, and Stuart Weitzman), refraining from discounting, and extricating itself from department stores. By expanding its portfolio, Tapestry hopes to transform itself from a mere handbag retailer to an "upscale fashion house." This corporate reinvention has seen Coach go to Tapestry, with the agenda of evolving from a single-brand specialty retailer to a "true house of emotional, desirable brands," in the words of Tapestry CEO Victor Luis.
However, it remains to be seen whether the mere act of grouping multiple brands under one name will be sufficient for the complete transformation the company hopes to achieve. Matters of brand cohesion and the forging of a collective brand identity are further open questions that Coach, now Tapestry, must eventually answer. Tapestry's choices towards answering these questions will no doubt impact the commercial fate of the company in the years to come.