Coach to acquire Stuart Weitzman

Handbags and accessories retailer Coach, agreed Tuesday to acquire women's luxury footwear company Stuart Weitzman from its private-equity owner Sycamore Partners for a total consideration of 574 million dollars (377.92 million pounds), which includes 44 million dollars in (28.9 million pounds) contingent payments. The deal is anticipated to close by May 2015, subject to customary closing conditions.

Coach said it will make initial cash payments of about 530 million dollars (348.95 million pounds), and also make up to 44 million dollars in contingent payments to Sycamore Partners upon the successful achievement of selected revenue targets over the three years following the closing of the acquisition.

Coach said it will fund the deal with cash on hand or other sources of financing available to it in the credit and capital markets.

"Stuart Weitzman is a leading American luxury designer footwear brand with a solid growth trajectory and further significant domestic and international development potential. Importantly, the size, scope and vibrancy of the Stuart Weitzman brand, along with the continuity of its management team, allows for a seamless transition to Coach ownership, as we continue to focus on Coach's brand transformation," Coach CEO Victor Luis said.

Coach selects Stuart Weitzman as its first acquisition

Stuart Weitzman is a designer and manufacturer of women's luxury footwear. It markets its products in fine speciality and department stores worldwide and in its own retail stores in the U.S. and Europe. It generated revenues of about 400 million dollars for the twelve months ended September 30, 2014. Sycamore Partners inherited Stuart Weitzman as one of the several brands it got when it took Jones Group private last year.

Coach to acquire Stuart Weitzman

At the time, Sycamore paid 1.2 billion dollars (790 million pounds) for a collection of brands that included Jones New York apparel, Easy Spirit, Nine West and Stuart Weitzman. The acquisition of the upscale brand complements Coach's leadership position in premium handbags and accessories, and provides incremental opportunity for growth.

New York-based Coach said it expects the acquisition to be immediately add to earnings per share, exclusive of transaction-related charges including anticipated purchase accounting adjustments and contingent payments related to the transaction.

Stuart Weitzman, Creative Director and Executive Chairman of Stuart Weitzman, "Coach has selected us as its first acquisition. 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. 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."

Following the completion of the deal, Stuart Weitzman has agreed to remain in his roles along with its CEO Wayne Kulkin, and management team to focus on growth of the business. COH closed Monday's regular trading session at 36.73 dollars, down 0.90 dollars on a volume of 4.50 million shares. In the past 52-week period, the stock has been trading in a range of 32.72 dollars to 56.59 dollars.



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