Shares of luxury handbag maker Coach fell 2 percent—to $39.21—in late morning trading on the heels of quite the controversial announcement. Apparently, the iconic New York-based leather goods brand has decided to change its name to Tapestry Inc, at the end of October. The move is an attempt to redefine after the acquisition of the Kate Spade and Stuart Weitzman brands.
According to the company’s Chief Executive Officer Victor Luis, “We are now at a defining moment in our corporate reinvention. In Tapestry, we found a name that speaks to creativity, craftsmanship, authenticity and inclusivity on a shared platform and values.”
The fashion house, like many others, is working to build a multibrand company at a time when consumer industries—like handbags—are struggling. Traffic is on the decline, at least at traditional brick-and-mortar stores, as consumers seek more affordable options at discount online outlets (often sourced overseas) and discount retailers. Coach actually bought up Kate Spade to help buff its handbag options and Stuart Weitzman to expand a presence in shoes to broaden its lifestyle brands appeal.
It seems like this move makes a lot of business sense, to absorb related companies and expand your offerings—diversify your portfolio—so why are shares down?
Well, despite the fact that the Coach brand is not going anywhere, longtime fans of the brand are not very happy with this change in corporate identity. And now executives have to pull double duty to show that they are not exclusively dependent upon the Coach brand to fuel business growth.
Indeed, social media users have not been too happy about this change, after 76 years as an industry leader. Many have taken to Twitter, of course, to vent their criticisms.
Former Nordstrom and Hudson’s Bay executive Andrea Wasserman, for example, tweeted, “This is bizarre & a strategy departure. Dying to know the logic.”
Similarly, nonprofit digital content director J. Christian Bernabe derided, “$COH changing its name to ‘Tapestry” is a horrible branding idea. Fire the executive who proposed the change.”
Another Twitter user, SpecialK, posted: “Coach is changing its name to a popular Carole King album & a terrible name for a leather bag maker! Tapestry.”