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Coach Acquires Stuart Weitzman In Line With Broader Strategy

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Jan. 21 2015, Updated 10:51 a.m. ET

Coach to acquire Stuart Weitzman

On January 6, 2015, Coach, Inc. (COH) announced that it was acquiring Stuart Weitzman, a premium footwear brand based in Spain. The purchase price came to about $574 million—$530 million up front, and $44 million payable upon the achievement of specific revenue targets.

The company expects to fund the purchase with available cash or a mix of debt and equity. The deal, the first-ever acquisition for Coach, is expected to close by May 2015.

Coach is part of the iShares Russell Mid-Cap Growth ETF (IWP) and the iShares Core High Dividend ETF (HDV).

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About Stuart Weitzman

Stuart Weitzman is currently owned by private equity firm Sycamore Partners. Sycamore acquired the brand upon completing the $2.2 billion acquisition of apparel retailer Jones and Co. earlier in April 2014.

Stuart Weitzman is a vertically integrated high-profile footwear manufacturer. The company sells footwear targeted at the premium women’s market. Manufactured in Spain, the company’s footwear is often unique, made using vinyl, cork, wallpaper, and even gold or diamonds.

Retail details

Stuart Weitzman also sells wallets and handbags, although footwear is its core category. The company reported revenues of ~$300 million in the twelve months through September 30, 2014. Revenues have grown at a compounded annual growth rate of 10% in the last five years.

Stuart Weitzman products are sold in over 70 countries. It has a retail network of ~118 stores worldwide. Products are also available online in the US, Europe, Hong Kong, and Canada.

An important point to note, the two brands will retail (XRT) (RTH) separately. Stuart Weitzman shoes won’t be available at Coach’s stores, nor will Coach products be available at Stuart Weitzman stores.

The next part of this series looks at the pros and cons of the transaction.

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