Coach acquired women’s luxury footwear brand Stuart Weitzman

Women’s luxury footwear brand Stuart Weitzman has been acquired by Coach, the New York design house of modern luxury accessories and lifestyle collections. According to Coach, the transaction will complement Coach’s current leadership position in premium handbags and accessories, while immediately adding to the company’s earnings as it continues to make meaningful progress against its brand transformation announced earlier this year.

Stuart Weitzman is a leading American luxury designer footwear brand with a solid growth trajectory and further significant domestic and international development potential,” said Victor Luis, Chief Executive Officer, Coach.

“Importantly, the size, scope and vibrancy of the Stuart Weitzman brand, along with the continuity of its management team, allows for a seamless transition to Coach ownership, as we continue to focus on Coach’s brand transformation. Over the medium term, we look forward to advancing the Stuart Weitzman brand’s global development, especially by leveraging Coach’s international infrastructure and expertise in handbags and accessories. In addition, we look forward to benefiting from the Stuart Weitzman team’s expertise in footwear development where they’re proven leaders in fashion and fit. Our strong balance sheet provides the flexibility to take advantage of this opportunity while re-investing in our core business and continuing to maintain our dividend at current levels,” added Coach’s Chief Executive Officer.

Stuart Weitzman markets its products in fine specialty and department stores worldwide and in its own retail stores in the U.S. and Europe. Stuart Weitzman realized net revenues of approximately $300 million for the twelve months ended September 30, 2014.

Over the last five years, Stuart Weitzman has experienced robust growth with sales growing at a 10% compounded annual rate driven by distribution, e-commerce and same store sales gains. Over the same period, the company has gained increasing global recognition by being the choice of key celebrities; with its iconic campaigns featuring Gisele Bundchen, Kate Moss and Natalia Vodianova, all photographed by Mario Testino.

Stuart Weitzman will continue as Creative Director and Executive Chairman of Stuart Weitzman Holdings, and together with Wayne Kulkin, Chief Executive Officer of Stuart Weitzman, and their management team, remains fully committed to the growth of the business.

Under the terms of the agreement, Coach will make initial cash payments of approximately $530 million to Sycamore Partners. In addition, Coach will make up to $44 million in contingent payments to private equity firm Sycamore Partners upon the successful achievement of selected revenue targets over the three years following the closing of the acquisition.