Coach in $574 million deal to buy luxury shoe brand Stuart Weitzman

New York -- In a deal that will greatly expand its luxury reach, Coach Inc. will acquire upscale footwear brand Stuart Weitzman Holdings from private equity firm Sycamore Partners. Coach will make initial cash payments of approximately $530 million to Sycamore Partners, and, in addition, will pay the firm up to another to $44 million in contingent payments upon hitting “selected revenue targets” over the next three years.



Stuart Weitzman sells its products in upscale specialty and department stores worldwide and in its own retail stores in the United States and Europe. The company had net revenues of approximately $300 million for the 12 months ended September 30, 2014. Coach posted $4.81 billion in revenue in its last fiscal 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 Coach chief executive Victor Luis who replaced longtime CEO Lew Frankfort last year. “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.”



Stuart Weitzman will continue as creative director and executive chairman of Stuart Weitzman Holdings LLC. He, along with Wayne Kulkin, CEO of Stuart Weitzman, and their management team, remains fully committed to the growth of the business.



“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,” said Weitzman. “We are excited to be working with the Coach team and leveraging its strong infrastructure to help us drive efficiency and expand our product mix to an even broader consumer base worldwide. We also look forward to supporting the Coach team with our technical and merchandising expertise in footwear."



Coach will finance the transaction with cash on hand or other sources of financing available to the company in the credit and capital markets. The acquisition is expected to close by May 2015.