The New York-based retailer says it intends to leave the management team at Stuart Weitzman, including its eponymous founder, in place. In addition to boosting current earnings and solidifying its leadership position in the high-end accessories markets, it says it hopes to benefit “from the Stuart Weitzman team’s expertise in footwear development, where they’re proven leaders in fashion and fit.”
Observers aren’t so sure. “The deal is a little surprising to us given the current struggles of the core Coach brand,” writes Sterne Agee analyst Ike Boruchow. “Under normal circumstances, a leading American handbag brand acquiring a leading American footwear brand would be a reasonable strategy. But Coach may have too many balls in the air right now. On top of that, we believe the business is currently burning through cash in the U.S.”
It is Coach’s first acquisition, and comes at a time when Stuart Weitzman is tearing up the red carpet in the United States, and poised for international expansion. “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,” says Weitzman, in the announcement. “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.”
With revenues of $300 million, Weitzman is best known for its slick, sexy marketing, including edgy videos from the likes of Julia Restoin Roitfeld and high-powered campaigns from Mario Testino, starring such fashion icons as Gisele Bundchen and Kate Moss.