COACH $574 Million Acquisition Of Luxury Shoe Brand Stuart Weitzman Holdings LLC

New York modern luxury accessories and lifestyle brand

It is planning to speed up its pformation by acquiring new high-end shoe brand.

Coach1 announced on the evening of 6, announced the formal agreement on the acquisition of leading ladies luxury shoe design and manufacturer Stuart Weitzman Holdings LLC and private Holdings Company Sycamore Partners.

It is reported that the paction value of up to 574 million U.S. dollars.

Under the terms of the agreement, Coach will pay Sycamore Partners the first amount of about $530 million in cash.

In addition, if Stuart Weitzman successfully achieves the designated sales target within three years after the completion of the acquisition, Coach will pay the most probable cost of Sycamore Partners to US $44 million.

In 2010, Stuart Weitzman Holdings Limited sold most of the company's shares.

Production retailer Jones Group Ltd.

However, Jones group, which has nearly 40 brands, has not been performing well in recent years.

Private Holdings Company Sycamore Partners bought Jones group in December 2013 for $2 billion 200 million (including $1 billion debt).

Coach stakeholders told the first Financial Daily reporter that "the paction will strengthen the leading position of Coach in the high-end handbags and accessories industry. At the same time, for the Coach that announced the brand pformation plan earlier this year and made good progress, the paction will enhance the company's profits in real time."

"Stuart Weitzman has the track record of steady growth, and the huge potential for further development in domestic and foreign markets", Coach CEO Victor Luis said. It is important that "Stuart Weitzman brand scale, business scope, growth momentum, and continuity of management team help to integrate the brand smoothly into the Coach family, while allowing Coach to continue to focus on implementing its brand pformation plan."

For the post acquisition planning, Victor Luis said, "Coach looks forward to promoting the global development of Stuart Weitzman brand through the use of international infrastructure and expertise in handbags and accessories industry.

In addition, Stuart Weitzman is the leader of footwear industry in fashion design and comfort. Coach will benefit from the expertise of its team in shoe development. "

The products of Stuart Weitzman are currently sold through boutique stores and department stores all over the world, as well as outlets located in the United States and Europe. There are about 45 stores in the US market. There are 61 stores and 10 stores in the international market. As of 12 months in September 30, 2014, the net sales of Stuart Weitzman are about 300 million dollars.

Expanded by distribution network.

Stuart Weitzman has been growing strongly in the past five years, and its annual sales compound growth rate is 10%.

After the acquisition, Coach said that Stuart Weitzman will continue to be the creative director and executive chairman of Stuart Weitzman Holdings LLC, in parallel with the chief executive Wayne Kulkin and management team to continue to develop brand business.

For the takeover, Coach said it would make payments through hand cash or other sources of financing from credit and capital markets.

Excluding the paction related expected takeover accounting adjustments and contingent costs, it is expected that the acquisition will increase the company's earnings per share.

It is expected that the acquisition will be completed by or before May 2015 after the usual delivery conditions have been reached.

Coach sales for the first quarter of fiscal 2015 ended September 27, 2014 at $1 billion 40 million, down 10% from 1 billion 150 million US dollars in the same period last year, but its sales in China increased by 10%.