Coach plans to buy luxury shoemaker Stuart Weitzman
January 6, 2015 12:53 PM
One of the world’s largest luxury handbag makers announced plans to buy a luxury footwear maker that recently made significant investments in its e-commerce presence.
Coach Inc. plans to buy Stuart Weitzman Holdings LLC from Sycamore Partners in a deal that could be worth as much as $574 million if certain revenue targets are hit, according to a Securities and Exchange Commission filing. The deal includes $530 million in cash and $44 million in contingency payments. Coach ranks No. 85 in the Internet Retailer 2014 Top 500 Guide.
The deal marries two companies that have seen their respective e-commerce sales grow over the years at a time when the luxury industry is increasingly focused on reaching customers on the web. Coach sold an Internet Retailer-estimated $401.5 million via its web site in 2013, up from an estimated $349 million in 2012, according to Internet Retailer’s Top500Guide.com. And Stuart Weitzman last year hired eBay Inc. veteran Monica Schwartz in July to fill the new role of chief global digital and e-commerce officer, to help grow the brand’s online presence domestically and globally
Adding Stuart Weitzman will bolster Coach’s offerings, says Coach CEO Victor Luis. “Stuart Weitzman is a leading American luxury designer footwear brand with a solid growth trajectory and further significant domestic and international development potential,” he says.
According to Coach’s SEC filing, Stuart Weitzman sold $300 million last year. In a November interview with Internet Retailer, Stuart Weitzman CEO Wayne Kulkin estimated one out of four pairs of the company’s shoes are sold on the web.
“That’s a pretty conservative estimate,” Kulkin said. “A decade ago, if you had asked anyone in our industry if they thought 25% of our products would be sold on the Internet, I don’t think anybody would’ve raised their hand.”
For the first quarter of fiscal 2015 ending Sept. 27, 2014, Coach reported net sales of $1.038 billion, down 9.7% from $1.150 billion during the same period the previous year. The company does not break out web sales in its filings.