Tapestry, Inc. TPR, a house of iconic accessories and lifestyle brands, has announced a definitive agreement to sell its Stuart Weitzman brand to Caleres, Inc. CAL for $105 million in cash. The transaction is expected to close in the summer of 2025.
TPR & CAL: Strategic Rationale
Tapestry highlighted that the sale of Stuart Weitzman aligns with its strategy of optimizing brand portfolio for long-term success. The company emphasized that this move will enable it to focus more effectively on core brands, Coach and Kate Spade, while ensuring that Stuart Weitzman continues to grow under Caleres, a company with deep expertise in the footwear industry.
Caleres, known for diverse portfolio of footwear brands, views the acquisition as an opportunity to strengthen its market presence. The company plans to integrate Stuart Weitzman into its operations while maintaining commitment to quality craftsmanship and innovation. With this acquisition, Stuart Weitzman will become a lead brand within the Caleres portfolio, contributing significantly to its Brand Portfolio segment, which is expected to generate nearly half of the company’s total revenues and continue to drive a substantial portion of operating profit.
TPR’s Brand Performance
In the second quarter of fiscal 2025, Tapestry delivered strong financial performance, driven by the continued momentum of its core brand. The company reported record quarterly revenues of $2.2 billion, up 5.3% year over year. This strong revenue growth was largely driven by Coach’s outstanding performance, which improved 10% in constant currency.
While Tapestry’s overall revenues grew, Kate Spade's underperformance remains a key concern. The brand reported a 10% revenue decline in the fiscal second quarter, highlighting weakening consumer demand and ongoing challenges in customer acquisition. This decline is particularly concerning as TPR is actively working to revitalize the brand through a 15% reduction in handbag styles and increased marketing investments, aimed at improving brand engagement and sales momentum.
Meanwhile, Stuart Weitzman continued to face headwinds, reporting a 16% revenue decline in the fiscal second quarter on a constant-currency basis. The decline was primarily caused by soft demand in Greater China and North America, as well as shipment timing issues in wholesale channels. Despite its strong brand recognition in the luxury footwear market, Stuart Weitzman’s ongoing challenges prompted Tapestry to divest the brand to Caleres. This move ensures that the brand is positioned for long-term success under a footwear-focused company.
TPR’s Strategy of Moving Forward
Tapestry remains committed to long-term, sustainable growth by strengthening its brand portfolio, enhancing digital capabilities and optimizing operational efficiency. The company continues to leverage deep consumer insights to expand its reach, particularly among Gen Z and Millennial consumers, while investing in customer engagement and omnichannel experiences to drive brand loyalty.
Profitability remains a key focus, with Tapestry working to enhance gross margins through disciplined expense management, optimized pricing strategies and an efficient supply chain. The company is also prioritizing direct-to-consumer channels and accelerating digital transformation, reinforcing its position as a leader in the global fashion and accessories market.
In the past three months, shares of TPR have gained 58.1%, outperforming the industry and the S&P 500 index’s growth of 2.6% and 3.6%, respectively.
TPR Stock Past Three Months Performance
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TPR presents a compelling investment opportunity, particularly for investors looking for a resilient, growth-oriented stock. With strong brand positioning and well-executed strategic initiatives, this Zacks Rank #2 (Buy) stock is well-positioned for continued long-term growth.
Other Key Picks in Retail
Deckers Outdoor Corporation DECK designs, markets and distributes footwear, apparel and accessories for casual lifestyle use and high-performance activities in the United States and internationally. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Deckers’ current financial-year sales and earnings indicates growth of 15.6% and 21.2%, respectively, from the year-ago figure. DECK delivered an average earnings surprise of 36.8% in the trailing four quarters.
Boot Barn Holdings, Inc. BOOT operates specialty retail stores in the United States and internationally. BOOT offers western and work-related footwear, apparel and accessories. It currently flaunts a Zacks Rank #1. BOOT delivered a trailing four-quarter earnings surprise of 7.2%, on average.
The Zacks Consensus Estimate for Boot Barn’s current financial-year sales and earnings indicates growth of 14.9% and 21.4%, respectively, from the year-ago figure.
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Today, See These 5 Potential Home Runs >>Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report
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Caleres, Inc. (CAL) : Free Stock Analysis Report
Tapestry, Inc. (TPR) : Free Stock Analysis Report
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