On Wednesday, luxury handbag maker Coach Inc. announced that it was changing its corporate name as it evolves into an upscale, multi-brand retailer. Its new name, Tapestry Inc. was not received well on social media or Wall Street.
Shares of the company fell by 3% in early Wednesday trading, but that drop was attributed by analysts due to strong results being posted by LVMH one of its biggest rivals, and to a wide reaching selloff on Wednesday in the consumer discretionary sector.
Nevertheless, social media’s reaction was harsh. Many users on Twitter criticized the company’s decision that Tapestry will now be the holding entity which will house Coach, Stuart Weitzman and Kate Spade brands. Coach had been in business with its same name for 76 years giving it very strong brand identity.
One former industry executive said the name change was a bizarre and a departure from strategy and would like to know their logic.
Despite several critical tweets CEO Victor Luis downplayed the backlash from social media. He said that some of the reaction on social media had been misplaced due to people thinking the company is changing the Coach brand name, which it is not doing.
Instead, said Luis the company is just creating a new corporate identity for Coach under a house of brands.
The CEO added that company management was thinking about a change in the corporate name previously, but decided to make the change after it acquired Kate Spade.
Coach, founded in 1941 in a Manhattan loft, has become a multi-billion enterprise, growing its business through the success of its handbags that for decades have been coveted by the wealthy across the globe.
However, Coach has lost some of its shine recently due in part to the financial crisis and increased shopping online. The company is attempting to regain the former glory it enjoyed through acquiring new brands, reducing the amount of discounts, and pulling out of some department stores.
Coach acquired Kate Spade earlier in 2017 for just over $2.4 billion and in 2015 bought shoemaker Stuart Weitzman.
Those acquisitions have helped Coach broaden its portfolio and to transform it into today’s upscale fashion house and not just a luxury handbag retailer.
On Wednesday, Coach said its name change will be official as of October 31, and will begin using the symbol TPR on the NYSE.