Tapestry: An Attractive Chinese Luxury Market Play

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About: Tapestry, Inc. (TPR)
by: Magnus Investments
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Magnus Investments
Long only, value, special situations, growth at reasonable price
Summary

Coach brand will drive Tapestry's growth with strong position in China.

Fixing Kate Spade and Stuart Weitzman will be a slow process.

Sustainable cash flow and a strong balance sheet offer downside protection.

Share price undervaluation is unwarranted given its growth prospects.

Shareholder return initiatives will drive the stock price higher.

Investment Overview

Tapestry Inc. (TPR) was created when Coach acquired Stuart Weitzman in 2015, and Kate Spade in 2017. The acquisition should bolster the company’s plan to build a fashion house of luxury