Tapestry Stock In Focus After Deal To Sell Stuart Weitzman To Caleres: Retail’s Cautious

With this acquisition, Caleres’ brand portfolio segment will generate nearly half of the company’s total revenue and over half of its operating profit

Shares of Tapestry Inc. slipped 0.3% in after-hours trading on Wednesday after the company’s announcement that it plans to sell the footwear brand Stuart Weitzman to Caleres (CAL) for $105 million in cash, with retail mood turning cautious.

The transaction is expected to close in the summer of 2025, subject to customary closing conditions.

"This transaction ensures that all our brands are positioned for long-term success and that we maintain a sharp focus on our largest value creation opportunities,” said Joanne Crevoiserat, CEO of Tapestry.

“At Tapestry, this means harnessing our position of strength to sustain Coach’s leadership and momentum while reinvigorating Kate Spade to drive durable organic growth and shareholder value. At the same time, we are pleased that we found Stuart Weitzman a home in Caleres – an ideal owner to guide its next chapter of growth.”

Caleres’s footwear brands include Famous Footwear, Sam Edelman, Allen Edmonds, Naturalizer, Vionic, among others. The acquisition furthers its strategic vision to grow its ‘brand portfolio’ segment with more global and direct-to-consumer reach.

Jay Schmidt, president and CEO of Caleres, said after the acquisition, Caleres’ brand portfolio segment will generate nearly half of the company’s total revenue and over half of its operating profit, Schmidt added.

According to a Reuters report, Tapestry’s Kate Spade and Stuart Weitzman brands have recently struggled due to softening luxury spending in North America and China.

Tapestry has also been focused on driving organic growth following its failed merger Capri Holdings.

Sentiment on Stocktwits moved to ‘neutral’ from ‘bullish’ a day ago. Message volume moved to ‘normal’ from ‘high.’

One Stocktwits user noted the uptick in footwear merger deals.

On Wednesday, Redburn Atlantic upgraded Tapestry to ‘Buy’ from ‘Neutral' with a $110 price target, Fly reported. According to the firm, the company’s brands are "excitingly positioned within the attractive premium accessories category."

For the second quarter, Tapestry posted earnings per share of $2.00, beating Wall Street estimates of $1.75.

Tapestry, focused on luxury accessories and fashion, owns and operates such brands as Coach, Kate Spade.

Tapestry stock is up 36.5% year-to-date.

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