Popular retailer sells struggling brand for head-turning price

One of the biggest trends we’ve seen in the retail industry over the past several years is dramatic consolidation.

It seems like many brands, stores, and corporations are constantly going through some kind of merger process. 

Large corporate incumbents are buying up smaller competitors, mom-and-pop shops are folding, once-popular mall stalwarts are filing for bankruptcy, and it seems like every suburban shopping strip has a shiny new big box store putting down roots.

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The fact of the matter is, the 2020s have caused a reckoning across the retail industry where only the biggest and most profitable survived. While many retailers intended to shut their doors temporarily while the worst of the pandemic passed, it became nearly untenable to reopen after months of profit loss and decreased foot traffic. 

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Restaurants, retailers, even some of the most popular mall brands and labels went under because they couldn’t float business for months without a life raft. 

And the damage isn’t done yet. A new prediction by Coresight suggests that 2025 could see up to 15,000 store closures — a 334.3% increase from just one year prior.

A Coach store in New York City. Coach is a classic American brand currently experiencing a resurgence in popularity. 

Michael M. Santiago/Getty Images

Changing consumer tastes affects retailers

But it’s not just covid or large corporations that are to blame for the changing retail landscape. 

Customers are incredibly fickle beings, and when their tastes change, business quickly follows. 

Take, for instance, the rapid decline of shopping malls over the last decade or so. 

Many malls now stand vacant — or at significantly reduced capacity — because shoppers simply prefer to go online or to cheaper outlet malls than at pricey indoor venues.

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They’re also less willing to pay more for brands they might ordinarily find at discount retailers like TJ Maxx or Amazon. And when consumers sense they’re consistently getting ovrecharged at a given store, they’ll be far less likely to keep that store in their regular rotation.

Top retailer selling popular label

But trends come and go, too. 

Sometimes, shoppers simply decide they like a given brand less, or they return to old favorites. 

Such is the case at Tapestry Brands  (TPR) , the parent company of labels like Coach and Kate Spade. 

For years, Coach and Kate Spade had grappled with struggling sales as customers opted for other upscale brands. But Coach in particular has had something of a resurgence, especially among Gen Z shoppers, and Tapestry has decided it wants to pour more of its resources into invigorating those sales. 

So it will sell Stuart Weitzman, the upscale shoe and accessory brand, about 10 years after purchasing the label.

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Tapestry bought Stuart Weitzman in 2015 for approximately $530 million. It’s now offloading it to Caleres for $105 million in an all cash deal — roughly 20% of the original purchase price. 

Caleres is a footwear focused company; it also owns brands like Famous Footwear, Sam Edelman, and Vionic. 

Stuart Weitzman only accounted for about 3% of Tapestry’s total sales, and now the company hopes the sale will allow it to re-focus on the things that work. 

“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,” Tapestry CEO Joanne Crevoiserat said of the transaction. “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.”

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