Luxury apparel retailers, such as Fossil and Coach-owner Tapestry, report a big shift to ecommerce during the coronavirus pandemic—and the shift is helping to attract new customers and improve other areas of business. Here’s a snapshot of how Canada Goose, Fossil, Tapestry, Qurate and Revolve performed during their second quarters.

Canada Goose

Luxury winter outerwear brand Canada Goose’s revenue declined 63.2% to $26.1 million in its fiscal Q1 ended June 28, down from $71.1 million in Q1 2019. The Canadian-based brand’s direct-to-consumer business, which includes its ecommerce operations and 22 stores, declined 70.1% to $10.4 million in the first quarter largely due to temporary store closures. The company said ecommerce sales were flat but did not provide more details.

While its online sales didn’t get a boost like some other apparel brands, Canada Goose is satisfied with its ecommerce results.

“We were able to maintain and retain our levels of ecommerce performance,” CEO Dani Reiss said on a call discussing the results, according to a SeekingAlpha transcript. Executives touted that the company didn’t heavily discount its products like other apparel brands were during the outset of the pandemic.

“We stayed full-price and that’s really important,” Reiss said. “In times like this some brands attempted to dilute the value of their brand…many more brands were promotional. To be able to [not heavily discount] in this environment and maintain our ecommerce performance is an excellent outcome.”

73% of the 124 apparel retailers ranked in the Digital Commerce 360 Top 500 were offering a sale online soon after the coronavirus caused many stores to close, according to a Digital Commerce 360 analysis on April 9.

advertisement

Fossil Group Inc. 

For watch brand Fossil Group Inc., ecommerce sales on its own website and on the online marketplaces it sells on accounted for nearly 50% of total revenue in its fiscal Q2 ended July 4, a big jump from 13% in Q2 2019. For the full-year 2020, Fossil expects digital sales will account for about one-third of sales.

Online sales on its own websites were up 138% year over year in Q2 and marketplace sales were up 20%, the company said without providing exact figures. Total net sales were down 48.3% to $259.0 million in Q2 from $501.4 million in the same period a year ago. That means ecommerce sales were approximately $129 million. For the first half of its fiscal year, Fossil’s revenue was $649.7 million, down 32.8% from $966.7 million in 2019.

A shift to ecommerce is helping Fossil’s overall business. The small box that watches or accessories ship in has lower freight costs than shipping a bulk wholesale order, for example, executives said on a call discussing the results with investors, according to a SeekingAlpha transcript. Additionally, Fossil is selling fewer SKUs on its site than it typically sells to its wholesale partners.

“We have 30% at least fewer SKUs and just imagine the efficiency of that,” CEO Kosta Kartsotis said on the call. “It’s easier to stay in stock, it’s much easier to align supply and demand and it’s got a much better cash conversion cycle since we get paid immediately.”

Since there aren’t sizes for watches and accessories, like there is in other apparel items like dresses, return rates haven’t been too high. Return rates are about 8% to 12%, Karsotis said.

advertisement

Tapestry

Tapestry, which owns luxury brands Coach, Kate Spade and Stuart Weitzman, reported its fiscal Q4 and year ended June 27. In Q4, ecommerce grew triple digits, the company said. Online sales accounted for roughly “mid-teens percentage” of the Q4 total revenue that reached $715.0 million, executives said on a call discussing the results, according to a SeekingAlpha transcript. Comparatively, in fiscal-year 2019, ecommerce represented roughly 10% of sales, executives said. Total revenue in Q4 is down 52.6% from $1.51 billion in Q4 2019.

“We’ve seen tremendous traction across our digital channels as a result, evidenced in part by the recruitment of new younger customers to our brand at an accelerated rate,” interim CEO Joanne Crevoiserat said on a call discussing the results, according to a SeekingAlpha transcript. ” In fact, in the fourth quarter alone, we recruited nearly 1 million new customers across brands in North America through our digital channels.”

Tapestry also said that nearly 20% of all digital customers made two or more purchases during the quarter, signifying some stickiness among customers.

Revolve Group Inc.

In the second quarter ended June 30, revenue at online-only apparel retailer Revolve Group Inc. fell 11.8% to $142.78 million from $161.89 million in Q2 2019. For the first six months of the year, sales declined 3.5% to $288.86 million from $299.24 million.

Sales during June increased year over year for the first time since the beginning of the coronavirus pandemic in March, the company said. Additionally, during the six weeks after the second quarter ended (July 1-August 10), net revenue has been up by a “low single-digit percentage” compared with the same period in 2019.

advertisement

In July, sales of beauty and home products have increased significantly year over year, while sales of special occasion outfits such as dresses are struggling. While there’s some improvement in the last couple months on dress sales—Revolve’s largest product category—revenue in this segment is still down year over year, the company said.

Qurate Retail Group

E-retailer and TV channel owner Qurate Retail Group reported a 19.6% increase in online sales to $2.19 billion from $1.83 billion for the second quarter ended June 30. For the first half of the year, online sales grew to $3.92 billion, up 7.7% from $3.64 billion.

In Q2, ecommerce sales for the QxH segment, which comprises sales from QVC and HSN, was up 15.3% to $1.20 billion. QVC international online revenue was up 29.1% to $337 million. Revenue at online-only apparel retailer zulily grew 16.2% to $277 million. For the Cornerstone Brands segment, which comprises five home and apparel brands, web sales were up 31.9% to $223 million.

Canada Goose is ranked No. 145 in Digital Commerce 360’s Top 1000 ranking of the largest North American online retailers. Revolve is No. 101, Fossil is No. 212, Qurate is No. 9 and Tapestry is No. 210.

Percentage changes may not align exactly with dollar figures due to rounding.

advertisement
Favorite