(Reuters) -Coach Ouder Tapestry sells its Stuart Weitzman brand to Dr. Scholl’s shoes owner Caleres for $ 105 million in cash, the companies said on Wednesday.
The disinvestment comes months after Tapestry said it was aimed at stimulating growth for his organic activities and “significant runway for us” after a derailed merger of $ 8.5 billion with Michael Kors owner Capri.
While Tapestry witnessed a strong demand for Tabby handbags from coach in the holiday quarter, Kate Spade and Stuart Weitzman struggled because of weak luxury editions in North America and China.
Stuart Weitzman, who made up about 3.6% of the total annual turnover of the company, reported an increase in loss of the entire year to $ 21.2 million of $ 6.7 million a year earlier.
“Stuart Weitzman will be a main brand for Caleres, and with this combination the brand portfolio segment will generate almost half of our total income and will continue to generate more than half of our business profit,” said Jay Schmidt, CEO of Caleres.
The brand is expected to have a profitable effect after its integration into the company, Schmidt added.
Caleres also houses luxury footwear brands Sam Edelman and Vince, and operates nearly 1,000 stores in the United States.
The deal is expected to close in the summer of 2025, with Caleres who want to finance it through the company’s rotating credit agreement, said it.
Bofa Securities serves as a financial adviser to Caleres and Morgan Stanley & Co. LLC works for carpet.
(Reporting by Savyata Mishra in Bengaluru; adaptation by Sriraj Kalluvila and Shinjini Ganguli)