Coach Parent Tapestry Investigated CEO Before Resignation

Tapestry Chairman and CEO Jide Zeitlin was reportedly under investigation for his personal behavior before he resigned.
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Tapestry  (TPR) - Get Report Chairman and CEO Jide Zeitlin was under investigation by the board for his personal behavior before he resigned, a media report says.

The Wall Street Journal reported that Tapestry, parent of Coach, Kate Spade and Stuart Weitzman, had hired a law firm to investigate allegations raised by at least one woman. 

Shares of the New York luxury-goods company at last check were up 3.4% at $13.57.

The woman accused Zeitlin of posing as a photographer under an alias to lure her into a romantic relationship more than a decade ago, the Journal reported, citing people familiar with the situation.

"In the past month, a woman I photographed and had a relationship with more than ten years ago reached out to various media organizations to express her concerns about what had occurred,” Zeitlin said in a statement to the Journal. 

“I felt compelled to resign today because I do not want to create a distraction for Tapestry, a company I care deeply about."

Zeitlin had been CEO since September. He'd served as chairman since November 2014.

Tapestry did not immediately respond to a request for comment.

The company had stated earlier that Zeitlin, a former Goldman Sachs investment banker, stepped down for "personal reasons" and Chief Financial Officer Joanne Crevoiserat had been named interim CEO.

The company said it has begun a search for a permanent CEO, which will include internal and external candidates.  

Todd Kahn, president, chief administrative officer and secretary, was named interim CEO and brand president of Coach.

Andrea Shaw Resnick, global head of investor relations and corporate communications, has been named the parent's interim CFO.

Susan Kropf, lead independent director, has been appointed chairwoman.  

"Jide has made meaningful contributions to Tapestry over the past 14 years, first as a director, and then as chairman, and most recently as CEO," Kropf said in a statement, noting Zeitlin had "led with purpose during these unprecedented times." 

Like so many other businesses, Tapestry was battered by the coronavirus pandemic shutdown.

In April, the company reported that it swung to a fiscal-third-quarter loss. It said it would cut 2,100 part-time workers across its brands, reduce corporate salaries and draw down $700 million from its $900 million revolving credit facility to add cash.

"These results, though pressured by the covid-19 pandemic, exceeded internal expectations from a top and bottom-line perspective," the company said. 

"Importantly, gross margin expanded on a year-over-year basis, reflecting lower promotional activity, while inventory declined from prior year."

Tapestry said that it expected to report fiscal-fourth-quarter results on Aug. 13.

The company said it ended the year with "a significant cash balance" of about $1.4 billion.