Coach acquires women's footwear brand Stuart Weitzman

10 Jan '15

3 min read

New York design house of modern luxury accessories and lifestyle collection, Coach said it has signed a deal with Sycamore Partners to acquire Stuart Weitzman Holdings LLC, a leading designer and manufacturer of women's luxury footwear.

According to Coach, the transaction will complement its position in premium handbags and accessories, while immediately adding to its earnings, as it continues to make meaningful progress in its brand transformation announced earlier this year.

Stuart Weitzman markets its products in fine specialty and department stores worldwide and in its own retail stores in the US and Europe and realised net revenues of approximately $300 million for the twelve months to September 30, 2014.

Over the last five years, Stuart Weitzman has experienced robust growth with sales growing at a 10 per cent compounded annual rate driven by distribution, e-commerce and same store sales gains.

The company has developed a global multi-channel distribution network including directly operated stores in the US and Europe, international licensed stores and shop-in-shops, and a significant global wholesale business, with the brand currently available in 70 countries.

Stuart Weitzman will continue as creative director and executive chairman of Stuart Weitzman Holdings LLC, together with Wayne Kulkin, chief executive officer of Stuart Weitzman, and the management team.

Coach will make initial cash payments of approximately $530 million to Sycamore Partners. In addition, Coach will make up to $44 million in contingent payments to Sycamore Partners upon the successful achievement of selected revenue targets over the three years following the closing of the acquisition.

Coach will finance the transaction with cash on hand or other sources of financing available to the company in the credit and capital markets and is anticipated to close by May 2015, subject to customary closing conditions, including expiration of the Hart-Scott-Rodino Antitrust waiting period.

Victor Luis, CEO at Coach said, "Over the medium term, we look forward to advancing the Stuart Weitzman brand’s global development, especially by leveraging Coach’s international infrastructure and expertise in handbags and accessories.”

“In addition, we look forward to benefiting from the Stuart Weitzman team’s expertise in footwear development where they are proven leaders in fashion and fit. Our strong balance sheet provides the flexibility to take advantage of this opportunity while re-investing in our core business,” he added.

Stuart Weitzman, creative director at Stuart Weitzman Holdings LLC, said, “In Coach, we have found a strategic partner that respects our culture, and offers the scale, resources, and global business acumen to enable us to realize our full potential.”

He too added, “We are excited to be working with the Coach team and leveraging its strong infrastructure to help us drive efficiency and expand our product mix to an even broader consumer base worldwide and look forward to supporting with our technical and merchandising expertise in footwear." (AR)

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