Much like fellow tourist destination Abercrombie & Fitch, Kate Spade is having a bit of a tough time right now, partly because there aren’t as many foreigners visiting the U.S. who are willing to shell out big bucks on shopping trips.
Kate Spade & Co fell the most in almost two years amid weakened sales to tourists, Bloomberg reports. The luxury handbag maker has been trying to keep its elite status in the minds of shoppers by reducing promotions at departments stores, and selling more items at full price.
That’s all well and good, but tourists are often the shoppers who drive those kinds of sales, and they’re not biting right now: the dollar is strong, which means tourists are putting off their trips to the U.S. If they do visit, they’re not as likely to spend big bucks shopping.
The resulting slump in sales is instead forcing Kate Spade to mark down merchandise at its outlet stores. The company also didn’t have enough inventory for some products that ended up being super popular, but the company says that will change.
Despite the dip, CEO Craig Leavitt told investors that the challenges are just short-term, and that Kate Spade is confident it can still bring in customers willing to pay full price.
Kate Spade Plunges as Dwindling Tourism Prompts Forecast Cut [Bloomberg]
by Mary Beth Quirk via Consumerist
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