Investment and Financing – Coach’s Parent Company Tapestry Sells Stuart Weitzman for $105 Million, Marking a New Shift in the Affordable Luxury Market

Tapestry Sells Off Stuart Weitzman, Deal Finalized

The American affordable luxury fashion group Tapestry recently announced that it has sold its high-end footwear brand Stuart Weitzman to Caleres for $105 million. This transaction is expected to be completed in the summer of 2025, meaning that Stuart Weitzman will officially leave the Tapestry system and become part of the Caleres brand portfolio.

Caleres is a 150-year-old American footwear group whose brands include Famous Footwear, Sam Edelman, Allen Edmonds, Naturalizer, and Vionic, primarily focusing on the mid-to-high-end footwear market. Caleres CEO Jay Schmidt stated that Stuart Weitzman will be an important part of the group, and he expects the brand to develop better under Caleres' operational framework.

This move by Tapestry is seen as part of its strategy to focus on core brands. In recent years, while Coach and Kate Spade have performed relatively stably, Stuart Weitzman has continued to incur losses, becoming a burden on the group. By divesting its unprofitable brand, Tapestry hopes to optimize its brand structure and improve overall profitability.

The Rise and Fall of Stuart Weitzman

Stuart Weitzman was founded in 1986 by its namesake designer. With exquisite craftsmanship and a minimalist, elegant design style, it secured a place in the high-end footwear market. The brand became famous for its "supermodel boots", frequently appearing on the Oscars red carpet and favored by celebrities.

In 2014, private equity firm Sycamore Partners acquired Jones Group Inc. for $2.2 billion, which included Stuart Weitzman, Nine West, and Jones New York. Later, in 2015, Tapestry (then still known as Coach Inc.) acquired Stuart Weitzman from Sycamore Partners for $574 million in cash, aiming to expand its footwear business and diversify its product line.

However, despite Tapestry's multiple investments after the acquisition—such as expanding product categories, accelerating global store expansion, and signing Yang Mi as a brand ambassador in 2019 to enhance brand recognition in China—these efforts failed to reverse the brand's decline.

According to financial reports:

• In 2019, Stuart Weitzman’s annual revenue was $389 million.

• In 2020, revenue fell 36% YoY to $286 million.

• In 2024, revenue declined another 14% YoY to $242 million.

• In Q2 FY2025 (ending December 28, 2024), sales dropped 15% YoY to $69.7 million.

At the same time, the store count also saw a sharp decline:

• North American stores decreased from 118 to 34.

• Overseas stores were reduced to just 60, with China being a key market.

Although China was once an important growth driver, increasing market competition has gradually eroded Stuart Weitzman’s market share. Due to continuous losses, Tapestry ultimately decided to abandon this brand to optimize asset allocation and focus on core business growth.

Tapestry's Strategic Adjustment: Focusing on Core Brands Coach and Kate Spade

As competition in the affordable luxury market becomes increasingly fierce, major fashion groups are continuously adjusting their business structures to adapt to changing consumer demands. By selling Stuart Weitzman, Tapestry hopes to concentrate resources on its two core brands, Coach and Kate Spade, to enhance brand profitability and market share.

Coach: Digital and Youth-Oriented Expansion

As Tapestry's flagship brand, Coach enjoys strong brand influence worldwide. In recent years, it has focused on:

• Attracting younger consumers by launching collaborations (e.g., Disney, Keith Haring, Tom Wesselmann).

• Expanding digital transformation, strengthening e-commerce and social media engagement.

• Maintaining a strong performance in China, driven by online and social media marketing strategies.

Kate Spade: Playful, Accessible Luxury

As a fashion accessories brand in the affordable luxury segment, Kate Spade is loved by young women for its playful and lively designs. The brand has:

• Expanded its product line, including apparel, footwear, fragrances, and lifestyle products.

• Increased its footprint in Asia to tap into growing consumer demand.

In contrast, Stuart Weitzman has not met Tapestry’s expectations in terms of market performance, and with intensifying competition in the footwear sector, it has struggled to find a clear growth trajectory. Therefore, Tapestry decided to divest the brand to optimize resource allocation.

Tapestry CEO Joanne Crevoiserat stated:

"Selling Stuart Weitzman allows us to focus on the greatest value-creation opportunities, ensuring all of our brands are positioned for long-term success."

Caleres' Acquisition Plan: How Will It Revitalize Stuart Weitzman?

For Caleres, acquiring Stuart Weitzman is a strategic move to expand into the high-end footwear market. Caleres has extensive experience in managing mid-to-high-end footwear brands, with names like Sam Edelman and Allen Edmonds performing stably in the Western markets.

To revitalize Stuart Weitzman, Caleres plans to:

1. Optimize supply chain operations to reduce costs.

2. Adjust brand strategy to reposition it effectively.

3. Expand distribution channels to increase its market reach.

Caleres President Jay Schmidt emphasized:

"Stuart Weitzman will become an essential part of our brand portfolio. Under Caleres’ operational framework, we believe the brand can regain momentum and drive new growth for the company."

A New Shift in the Affordable Luxury Market: How Should Brands Respond to Challenges?

Tapestry’s sale of Stuart Weitzman signals that the affordable luxury market is undergoing a new adjustment cycle. Facing global economic fluctuations, evolving consumer behavior, and intensifying competition, brands must continuously adapt, refine strategies, and optimize operations to maintain their competitive edge.

For Tapestry, the key to future growth lies in:

• Further strengthening the brand value of Coach and Kate Spade.

• Enhancing engagement with younger consumers.

• Driving innovation and digital transformation.

For Caleres, the challenge will be whether it can successfully revive Stuart Weitzman and restore its profitability.

In the fast-changing fashion industry, a brand’s success or failure often depends on how quickly it can adjust strategies and capture market trends. Tapestry’s divestiture of Stuart Weitzman may mark a fresh beginning for its future growth.