Dive Brief:
- Tapestry has agreed to sell Stuart Weitzman to Caleres in a $105 million cash deal, according to a press release Wednesday. The transaction is expected to close this summer.
- The sale allows Tapestry to focus on its other brands, Coach and Kate Spade, which CEO Joanne Crevoiserat said are positioned for long-term success and offer more “value creation opportunities.”
- Calares CEO Jay Schmidt said Stuart Weitzman will become a lead brand in its portfolio and advance its global and DTC reach. Calares owns Famous Footwear, Sam Edelman and Allen Edmonds.
Dive Insight:
Tapestry bought Stuart Weitzman in 2015 for about $530 million and is now selling the shoe brand for about 20% of its original price. David Swartz, senior equity analyst for Morningstar Research Services, said this sale price suggests the brand has been a big disappointment for Tapestry and a bad fit for the conglomerate from the start.
The brand represented about 3% of Tapestry’s total sales.
Stuart Weitzman, like Kate Spade, has seen consistent revenue declines while its bigger sister brand Coach has led Tapestry to sales growth. Tapestry has been working to lead Kate Spade to sustainable growth, including naming a new president.
With the deal to merge with Capri Holdings off the table and the sale of Stuart Weitzman, Tapestry seems poised to focus on its handbag brands.
“It makes sense for Tapestry’s management to focus on trying to build Kate Spade without the distraction of trying to fix Stuart Weitzman at [the] same time,” Swartz said. “That said, it’s disappointing that with the collapse of the Capri merger and now the sale of Stuart Weitzman, Tapestry’s plans of being a large luxury house are not happening.”
In its most recent quarter, Tapestry logged $2.2 billion in Q2 sales, a 5.5% year-over-year increase, marking its best performance since 2021 and a record for the company.
Meanwhile, publicly traded Caleres will fund the acquisition through its revolving credit agreement. In its most recent earnings report in December, Caleres reported sales of $740.9 million, a 2.8% year-over-year decrease.
