The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — Coach Inc. will buy women's luxury footwear company Stuart Weitzman Holdings LLC, as it looks to expand its high-end offerings to better compete with rivals such as Michael Kors Holdings Ltd and Kate Spade & Co .
Coach, known for its Poppy handbags, said it would buy Stuart Weitzman from private equity firm Sycamore Partners in a deal valued at up to $574 million.
Companies such as Michael Kors and Kate Spade have eaten into New York-based Coach's market share in North America with their affordable and trendier handbags and accessories.
Coach is realigning its business by cutting promotions and shuttering underperforming stores.
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The company said on Tuesday it would make initial cash payment of about $530 million to Sycamore Partners and pay up to $44 million on achievement of certain revenue targets over the three years after the acquisition closes.
Sycamore Partners acquired Stuart Weitzman last year as part of its $2.2 billion purchase of Jones Group Inc, the fashion company that owns retail chains Nine West and Jones New York.
Reuters reported on Monday that Coach was nearing a deal to buy Stuart Weitzman.
The Wall Street Journal first reported that the two companies were close to a deal.
Coach's shares were up 1.5 percent at $37.27 in premarket trading on Tuesday.
By Yashaswini Swamynathan. Editor: Kirti Pandey.
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