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Coach, known for its Poppy handbags, said it
would buy Stuart Weitzman from private equity firm Sycamore
Partners in a deal valued at up to $574 million.
Companies such as Michael Kors and Kate Spade have eaten into
New York-based Coach's market share in North America with their
affordable and trendier handbags and accessories.
Coach is realigning its business by cutting promotions and
shuttering underperforming stores.
The company said on Tuesday it would make initial cash payment
of about $530 million to Sycamore Partners and pay up to $44
million on achievement of certain revenue targets over the three
years after the acquisition closes.
Sycamore Partners acquired Stuart Weitzman last year as part of
its $2.2 billion purchase of Jones Group Inc, the fashion
company that owns retail chains Nine West and Jones New York.
Reuters reported on Monday that Coach was nearing a deal to buy
Stuart Weitzman.
The Wall Street Journal first reported that the two companies
were close to a deal.
Coach's shares were up 1.5 percent at $37.27 in premarket
trading on Tuesday.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by
Kirti Pandey)
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