Tapestry, the fashion powerhouse, concludes Stuart Weitzman's sale to Caleres
Tapestry Sells Stuart Weitzman to Caleres for $120.2 Million
Tapestry, the parent company of Coach and Kate Spade, has sold the luxury footwear brand Stuart Weitzman to Caleres for $120.2 million. The deal, which was initially announced in February, includes $11.5 million in cash received at closing.
The sale represents a significant move for Tapestry, as it frees up space to focus on its other larger brands. However, the decision to sell Stuart Weitzman may be seen as a disappointment, as Tapestry once looked to be a luxury conglomerate with plans to acquire Capri Holdings. The Federal Trade Commission sued to block Tapestry's planned acquisition of Capri Holdings, and the companies terminated the agreement last year.
For Caleres, the acquisition of Stuart Weitzman will increase its presence in the global footwear market. The brand will make up nearly half of Caleres' total revenue going forward. Caleres' CEO, Jay Schmidt, has stated they will focus on driving growth and profitability despite challenging operating conditions.
In Tapestry's most recent earnings report, Stuart Weitzman's revenue fell 18% to $46 million. This reliance on a single brand may pose a risk if it underperforms. Selling Stuart Weitzman was probably the right move for Tapestry, according to David Swartz, senior equity analyst for Morningstar Research Services.
Caleres owns Famous Footwear, Sam Edelman, and Allen Edmonds in addition to Stuart Weitzman. The new president of Stuart Weitzman is Mara Gross, who has been appointed to lead the brand. Jonathan Lelonek has been appointed as the brand president of Stuart Weitzman by Caleres.
Caleres reported Q1 sales of $614.2 million in May, a decrease of 6.8% year over year. Tapestry's overall revenue grew 7% year over year, led by Coach. No new facts were presented regarding Tapestry's most recent earnings report or the revenue of Stuart Weitzman.
The sale of Stuart Weitzman is a significant shift for both Tapestry and Caleres. As Tapestry moves forward, it will focus on its other brands, Coach and Kate Spade, while Caleres expands its footwear portfolio with the addition of Stuart Weitzman.
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