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Coach parent Tapestry will sell its Stuart Weitzman brand to Dr Scholl’s footwear owner Caleres for $105 million in cash, the companies said on Wednesday.
The divestment comes months after Tapestry said it was focused on driving growth for its organic business and had “significant runway ahead” following a derailed $8.5 billion merger deal with Michael Kors-owner Capri.
While Tapestry witnessed strong demand for Coach’s Tabby handbags in the holiday quarter, Kate Spade and Stuart Weitzman struggled due to weak luxury spending in North America and China.
Stuart Weitzman, which made up about 3.6 percent of the company’s total annual revenue, reported an increase in full-year loss to $21.2 million from $6.7 million a year earlier.
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“Stuart Weitzman will be a lead brand for Caleres, and with this combination the brand portfolio segment will generate nearly half of our total revenue and will continue to generate over half of our operating profit,” said Caleres CEO Jay Schmidt.
The brand is expected to operate profitably following its integration into the company, Schmidt added.
Caleres also houses luxury footwear brands Sam Edelman and Vince, and operates nearly 1,000 retail stores in the United States.
The deal is expected to close in the summer of 2025, with Caleres aiming to fund it through the company’s revolving credit agreement, it said.
BofA Securities is serving as Caleres’s financial advisor, and Morgan Stanley & Co. LLC is working for Tapestry.
By Savyata Mishra; Editing by Sriraj Kalluvila and Shinjini Ganguli
Learn more:
Tapestry and Capri Call Off Their Merger
The $8.5 billion deal is off after the US Federal Trade Commission successfully blocked it in court. In announcing the termination, the Coach-owner said it would buy back stock, while Capri outlined a turnaround plan that includes closing some Michael Kors stores.
