Dive Brief:
- Tapestry completed the sale of Stuart Weitzman to Caleres, the company said Monday.
- Caleres bought the brand for $120.2 million, including $11.5 million in cash received at closing, according to a news release from Caleres.
- The deal was initially announced in February. With the footwear brand out of its portfolio, Tapestry has freed up space to focus on its other, larger brands: Coach and Kate Spade.
Dive Insight:
Tapestry first acquired Stuart Weitzman in 2015 for about $530 million, a stark difference from the current sale price to Caleres.
Like Kate Spade, Stuart Weitzman saw consistent revenue declines during Tapestry’s earnings results, while the larger Coach brand drove much of the company’s recent growth. Stuart Weitzman represented about 3% of Tapestry’s total sales.
In February, Tapestry CEO Joanne Crevoiserat said Coach and Kate Spade offered the company more “value creation opportunities” and were positioned for long-term success.
In Tapestry’s most recent earnings report, Stuart Weitzman’s revenue fell 18% to $46 million, while the company’s overall revenue grew 7% year over year, led by Coach. Tapestry is set to report fourth-quarter and fiscal 2025 earnings on Aug. 14.
“Stuart Weitzman was never successful under Tapestry’s ownership and has been declining,” David Swartz, senior equity analyst for Morningstar Research Services, said in an email. “As a luxury footwear brand, it didn’t fit well with Coach and Kate Spade since they are primarily handbag brands. As suggested by the low price that Tapestry received for it, there was no real plan to fix Stuart Weitzman, and it has mostly just been a distraction.”
While selling Stuart Weitzman was probably the right move for Tapestry, Swartz said it still represents a disappointment for the company, which once looked to be a luxury conglomerate with plans to acquire Capri Holdings. Those plans were dashed after the Federal Trade Commission sued to block the deal, and the companies terminated the agreement last year.
“It’s a bit risky since Tapestry isn’t diversified,” Swartz said. “Coach has been doing great lately, but Tapestry would be in trouble if it cooled off for any reason.”
Meanwhile, the Stuart Weitzman deal offers Caleres further expansion in the global footwear market. Caleres also owns Famous Footwear, Sam Edelman and Allen Edmonds.
Jonathan Lelonek, who most recently served as senior vice president for Stuart Weitzman wholesale, will become Stuart Weitzman brand president, per Caleres’ release.
“With the addition of Stuart Weitzman, our Brand Portfolio segment will represent nearly half of our total revenue going forward,” said Jay Schmidt, president and CEO of Caleres. “As we integrate this iconic brand, we remain committed to preserving the artistry, quality and renowned fit at the brand’s core.”
In May, publicly traded Caleres reported Q1 sales of $614.2 million, down 6.8% year over year and below its expectations. At the time, Schmidt said that despite the challenging operating environment, the company would redouble its efforts to drive growth and profitability.