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Tapestry to Offload Stuart Weitzman in $105M Deal With Caleres
TPRTapestry(TPR) ZACKS·2025-02-20 17:25

Core Insights - Tapestry, Inc. has entered into a definitive agreement to sell its Stuart Weitzman brand to Caleres, Inc. for 105millionincash,withthetransactionexpectedtocloseinthesummerof2025[1]−ThesalealignswithTapestry′sstrategytooptimizeitsbrandportfolio,allowingittofocusoncorebrandsCoachandKateSpadewhileensuringStuartWeitzman′sgrowthunderCaleres[2]−Caleresviewstheacquisitionasameanstostrengthenitsmarketpresence,planningtointegrateStuartWeitzmanintoitsoperationsandmaintainacommitmenttoqualitycraftsmanshipandinnovation[3]Tapestry′sBrandPerformance−InQ2offiscal2025,Tapestryreportedrecordquarterlyrevenuesof105 million in cash, with the transaction expected to close in the summer of 2025 [1] - The sale aligns with Tapestry's strategy to optimize its brand portfolio, allowing it to focus on core brands Coach and Kate Spade while ensuring Stuart Weitzman's growth under Caleres [2] - Caleres views the acquisition as a means to strengthen its market presence, planning to integrate Stuart Weitzman into its operations and maintain a commitment to quality craftsmanship and innovation [3] Tapestry's Brand Performance - In Q2 of fiscal 2025, Tapestry reported record quarterly revenues of 2.2 billion, reflecting a 5.3% year-over-year increase, primarily driven by a 10% improvement in Coach's performance [4] - Kate Spade experienced a 10% revenue decline in the same quarter, attributed to weakening consumer demand and challenges in customer acquisition, prompting Tapestry to implement a 15% reduction in handbag styles and increase marketing investments [5] - Stuart Weitzman faced a 16% revenue decline in Q2 on a constant-currency basis, mainly due to soft demand in Greater China and North America, as well as shipment timing issues [6] Tapestry's Strategic Direction - Tapestry is committed to long-term sustainable growth by enhancing its brand portfolio, improving digital capabilities, and optimizing operational efficiency [7] - The company is focusing on profitability by enhancing gross margins through disciplined expense management, optimized pricing strategies, and an efficient supply chain [8] - Tapestry is prioritizing direct-to-consumer channels and accelerating digital transformation to reinforce its position in the global fashion and accessories market [8] Stock Performance - Over the past three months, Tapestry's shares have gained 58.1%, significantly outperforming the industry and the S&P 500 index, which grew by 2.6% and 3.6%, respectively [9]