Tapestry to sell Stuart Weitzman at a loss to Caleres, will be star in new owner’s portfolio

It’s just a few months since fashion giant Tapestry was frustrated by the American competition authorities in its ambition to become an even bigger name through buying Capri Holdings. But now, instead of growing, its brand portfolio is shrinking as it has just announced a deal to sell Stuart Weitzman.

The Stuart Weitzman brand was bought from private equity firm Sycamore Partners by Tapestry (back when it was still called Coach) in 2015 for $574 million. And it will soon be owned by Caleres, the American footwear specialist. The purchase price is just $105 million in cash and the deal should complete this coming summer.

“Stuart Weitzman is an iconic global footwear brand, whose teams have added to the passion, creativity, and craftsmanship of our organization over the last decade,” said Tapestry CEO Joanne Crevoiserat. “Importantly, as diligent stewards of our portfolio and disciplined allocators of capital, this transaction ensures that all our brands are positioned for long-term success and that we maintain a sharp focus on our largest value-creation opportunities. 

For Tapestry, this means “harnessing our position of strength to sustain Coach’s leadership and momentum while reinvigorating Kate Spade to drive durable organic growth and shareholder value. At the same time, we are pleased that we found Stuart Weitzman a home in Caleres – an ideal owner to guide its next chapter of growth.”

And Caleres president and CEO Jay Schmidt said he has “long admired Stuart Weitzman for the brand’s pivotal role in shaping the footwear industry. As we bring this iconic brand into the Caleres portfolio, we are committed to preserving its legacy of craftsmanship, quality and fit while driving it forward. 

“The acquisition of Stuart Weitzman advances our strategic agenda to grow our Brand Portfolio segment with more global and direct-to-consumer reach”. 

We’re told Stuart Weitzman “will be a lead brand for Caleres, and with this combination the Brand Portfolio segment will generate nearly half of our total revenue and will continue to generate over half of our operating profit. 

“We will leverage our demonstrated, best-in-class footwear capabilities while pursuing category and channel growth. We expect to operate the brand profitably post integration.”

While Tapestry has clearly struggled to gain traction with Stuart Weitzman, that brand being under the ownership of a footwear specialist that sees it as a shining light in its portfolio could be good news for it, as indicated by Schmidt’s belief that it can make a profit from its new purchase.