Coach fashion house buys Stuart Weitzman for $574 million cashCraig Dalton (Author) Published Date : Jan 07, 2015 04:08 ET
New York-based luxury fashion house, Coach, has offered to buy up Stuart Weitzman a midrange luxury shoe maker for up to $574 million in cash. And to add to the excitement, Coach has pledged to retain the company s 72-year old executive chairman and creative director, Mr. Weitzman, to help Coach take over red carpet events and celebrity stores globally.
Coach s mainstay has been ladies luxury handbags, but the demand for this has slumped in recent times due to stiff competition from rival companies who offer exclusive and pricier handbag lines. This prompted Coach to cut down on discounts eating into its profits, and to upgrade its services to include upscale lifestyle brands that included coats, shoes, and eyewear yet Coach s sales over the last quarter has dropped, and this affected its gross profit for the last year.
But considering the move to acquire Stuart Weitzman, Coach will be better positioned to rise back to its feet again considering the fact that Weitzman shoes and sandals have become celebrities delight in recent times. Weitzman s Nudist sandal which comes with thin straps and pin heels retails for $398, and its 5050 up-to-the-knee boot is an international best-seller at $635. Kate Middleton wearing Weitzman s Corkswoon wedge pumps at the 2012 Olympics shot the brand to limelight due to the media attention it garnered. Kate Middleton was then engaged to be married to Prince William the Duke of Cambridge and the heir to the British throne.
According to Jason B. Cohen, a luxury branding expert with a creative agency in New York, Coach is at a place where it needs to reassert its luxury credentials. He went further to state that Stuart Weitzman isn t Jimmy Choo, but it s a very highly regarded brand that commands a significant price and is executing luxury as it should be. And since Mr. Weitzman is a reputable hands-on manager with the ability to turn Coach around, Cohen affirmed that If Stuart Weitzman was not part of the deal, I wouldn t be interested.
Mr. Weitzman started his footwear career at his father s shoe factory in Haverhill, Mass., where he sketched his first footwear at age 16. He later worked at his family business for many years and then later at Caressa, a shoe company, before starting his own shoe line in 1986. Weitzman later acquired Caressa and metamorphosed into present day Stuart Weitzman which reporting $300 million in annual sales revenue ending September 30, still manufactures its shoes in-house.
In an interview with Business of Fashion in October, Weitzman states that 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. 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.
And Victor Luis, Coach s chief executive couldn t agree more: Stuart Weitzman is a leading American luxury designer footwear brand with a solid growth trajectory and further significant domestic and international development potential.
Coach fashion house buys Stuart Weitzman for $574 million cash