The reshuffling seems to have already begun at Tapestry Inc., which multiple sources have said is close to selling off its Stuart Weitzman brand — just as the company prepares to defend its $8.5 billion buyout of Capri Holdings Ltd. in Manhattan federal court on Monday.
The brand’s chief executive officer Giorgio Sarné is also said to have left the company.
A spokesperson for Tapestry declined to comment.
Tapestry owns Coach, Kate Spade and Stuart Weitzman and is looking to expand with Capri’s portfolio of Michael Kors, Versace and Jimmy Choo.
The Federal Trade Commission sued to stop the deal in April, charging, in part, that the buyout would give the firm undo control over the accessible luxury handbag market.
The sale of Stuart Weitzman wouldn’t change that equation, but it would demonstrate a certain willingness for Tapestry to shake up its portfolio ahead of the trial. A deal for Stuart Weitzman would also help Tapestry raise some extra funds and offload a business that has struggled recently.
Even before the FTC challenged the acquisition of Capri, there was speculation that Tapestry would seek to sell some of its smaller businesses to help fund the deal and focus on the larger brands.
For the fiscal year ended June 29, Stuart Weitzman’s revenues fell 14 percent to $241.5 million with operating losses of $21.2 million, according to Tapestry’s latest financial report. The brand has 34 doors in North America and 60 stores in the rest of the world.
On a call with analysts last month, Joanne Crevoiserat, Tapestry’s chief executive officer, said of Stuart Weitzman: “Our results for the year were challenged, significantly impacted by external pressures in the brand’s two key markets of North America and Greater China. Despite disappointing financial results, we continue to focus on brand building initiatives to drive awareness, growth and profitability long term.”
During the fiscal fourth quarter, Stuart Weitzman expanded its assortment of shoes and extended into new and emerging categories, including men’s and handbags.
“Importantly, new innovation is driving traction at wholesale with the business growing double digits at [points of sales] in North America in the fourth quarter,” Crevoiserat said. “Further, order bookings through spring ’25 season are up over 30 percent to last year. This will support an improvement in revenue and profitability trends in the year ahead.”
Tapestry, then Coach Inc., acquired Stuart Weitzman in 2015 from Sycamore Partners in a $574 million deal.
— With contributions from Miles Socha
