Cowen & Co says inflation to squeeze luxury retailers' sales

TPR Co

21/11/2022 16:39

** Brokerage Cowen & Co states inflation to tighten North
American luxury retailers' sales as high costs hit consumers
    ** Brokerage retains "outperform" rating on U.S.-based
Tapestry Inc  TPR.N  and UK-based Capri Holdings Ltd  CPRI.N 
    ** Notes demand decelerated for both firms owing to layoffs,
rising interest rates and volatile capital markets 
    ** Cowen & Co expects both retailers to raise prices: TPR's
prices to remain competitive, while CPRI's prices will track
expensive European luxury peers 
    ** Brokerage expects CPRI and TPR to avoid excess inventory
this holiday season
    Tapestry:
    ** Cowen & Co expects TPR to leverage emotional connection
its customers have with its brands as part of its marketing
strategy  
    ** Brokerage notes how co leveraged its association with
rapper Lil Nas to add new and younger customers 
    ** TPR's Kate Spade jewelry business can achieve long-term
revenue of $2 bln as co refocuses on novelty - Cowen & Co 
    Capri Holdings:
    ** Brokerage sees CPRI's strategy for higher revenue per
unit through brand elevation in the men's wear section
    ** Expects CPRI to expand its Michael Kors and Jimmy Choo
brands 
    ** Up to last close CPRI and TPR down 19% and 13.8%,
respectively, YTD
 (Reporting by Johann M Cherian in Bengaluru)
 ((johann.mcherian@thomsonreuters.com;))