Coach is not really luxury. It’s the entry-level line for high school and college girls who are looking for a step above their local mall brand. But in recent years they’ve been upping their game, coming out with a fun clothing and accessories line that’s been capturing the attention of street style stars and models alike. It seems like Coach is determined to climb the ranks slow and steady, and today they announced their first major acquisition. For $530 million, the American brand has just purchased Stuart Weitzman.
While it seems they had some competition including Brown Shoe Co. and Advent International Group, Coach was able to secure the luxury footwear brand for a little over half a billion, a steal considering most experts estimate Stuart Weitzman is actually worth closer to $800 million. Details of the sale include a $530 million cash payment to Sycamore Partners, current owners of the brand, and approximately another $44 million to be paid over the next three years contingent on “selected revenue targets.”
“Stuart Weitzman is a leading American luxury designer footwear brand with a solid growth trajectory and further significant domestic and international development potential. 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,” said Victor Luis, CEO of Coach. “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.”
Stuart Weitzman, the creative director and executive chairman of his eponymous brand agrees with Luis saying, “In Coach, we have found a strategic partner that respects our culture, and offers the scale, resources, and global business acumen to enable us to realize our full potential.” While it seems the acquisition may be surprising for the handbag brand, Weitzman goes on to say that the two companies can be mutually beneficial to one another, and that “we also look forward to supporting the Coach team with our technical and merchandising expertise in footwear.”
It seems we can safely assume footwear is in the cards as Coach restructures, as well as a decisive move toward the luxury market. Sure, we loved their leather totes or signature satchels when we needed a cute book bag in high school, but whether or not the American brand can transition into a true luxury company remains to be seen. If their recent moves are any indication we might see some pretty great things from them sooner rather than later, not to mention a global expansion of Stuart Weitzman.
