Coach/Stuart Weitzman Acquisition Completed for How Much?

A compact crossbody Coach bag.
A compact crossbody Coach bag.

Earlier this year Haute Living reported Coach Inc. will be acquiring designer footwear company Stuart Weitzman for $574 million. On Monday, May 4th, the luxury lifestyle brand revealed the acquisition of the women’s luxury footwear brand is complete.

Coach purchased Stuart Weitzman from private equity firm Sycamore Partners. At the acquisition closing, Coach made cash payments of roughly $530 million to the private equity firm. Coach will continue to make $44 million in conditional payments to Sycamore Partners upon the successful achievement of revenue targets over the span of the next three years, following the closing of the deal.

The acquisition is expected to add more values than the cost of the deal over time. The completion of the transaction also balances Coaches global leadership position in premium handbags and accessories as well as contributes to the company’s earnings as it continues to transform the brand’s image.

The founder of the luxury shoe brand Stuart Weitzman will remain as Creative Director and Executive Chairman of Stuart Weitzman Holdings LLC. Wayne Kulkin, the Chief Executive Officer of Stuart Weitzman will also remain in position.

This acquisition is part of an effort to give Coach a financial face-lift amid declining sales as well as increased competition in the market. In January, Coach reported profit decline in its fiscal second quarter. Comparable sales from North America fell 22 percent. Total sales dropped by 14 percent to $1.22 million from $1.42 million a year ago. North American sales fell by 20 percent and international sales fell by one percent, according to Forbes.

In June, the lifestyle luxury brand also announced it will close its under-performing retailers. It is slated to close 70 of its 350 stores in North America and switching its focus to its flagship stores as well as other better performing stores. Additionally, Coach also announced it will decrease the number of its factory outlets.

(Photo via Coach Facebook page)