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interface news reporter | huang shan

interface news editor | lou qiqin

according to footwear news, a us media outlet, several unnamed insiders said that the us fashion group tapestry is about to sell its high-end shoe brand stuart weitzman. tapestry group also owns the well-known light luxury brands coach and kate spade.

tapestry group declined to comment on the news. but it can be confirmed that giorgio sarné, ceo of the stuart weitzman brand, will leave in october 2024.

tapestry group is currently in an antitrust lawsuit against the us government. in august 2023, tapestry group announced that it would acquire capri, another light luxury group, for us$8.5 billion. the latter owns three brands: michael kors, versace and jimmy choo.

the us antitrust agency ftc subsequently sued tapestry group, arguing that the merger would enable the group to form a monopoly in the affordable luxury market and eliminate direct competition in the affordable luxury market. on september 9, 2024, the lawsuit was opened in new york.

if tapestry group loses the lawsuit, its plan to merge with capri group will be shelved. the above media quoted sources as saying that the sale of stuart weitzman brand at this time shows tapestry group's intention to reorganize its brand portfolio. in fact, before the announcement of this merger plan, it was reported that tapestry group planned to sell its small-scale brands in exchange for cash flow.

stuart weitzman is currently the smallest brand under the tapestry group, with revenue accounting for only 3.6% of the entire group in the 2023/24 fiscal year (12 months ending june 29, 2024), far from the 20% and 76.4% of sister brands kate spade and coach. in recent years, stuart weitzman's performance has not been boosted, which runs counter to the goal when it was acquired by tapestry group nine years ago.

in 2015, tapestry group (then known as coach) acquired the stuart weitzman brand from private equity fund sycamore partners for us$574 million (approximately rmb 4.083 billion) in cash.

in the 2014 fiscal year before the acquisition, stuart weitzman's revenue was close to us$300 million (approximately rmb 2.134 billion), with an average annual compound growth rate of 10%. at that time, stuart weitzman brand products were sold in 118 retail outlets in more than 70 countries around the world, 47 of which were located in the united states.

it is worth noting that at that time, very few of stuart weitzman's overseas retail outlets were located in the chinese market, but the brand had begun to be sought after by domestic consumers with a pair of popular 5050 classic over-the-knee boots that were popular in europe and the united states.

stuart weitzman 5050 over-the-knee boots effectively modify the leg shape, and the legs wearing this pair of boots look extremely slender visually. this pair of shoes became popular with the help of european and american female stars wearing them, and its influence began to spread from the european and american markets to the asian market.

many chinese students and tourists in north america were the first to flock to the official websites of major american retailers to buy stuart weitzman's 5050 over-the-knee boots, even though the shoes cost 5,000 to 6,000 yuan. the influx of asian customers also boosted the sales of other shoes of the brand. domestic consumers who follow european and american pop culture also use purchasing agents to purchase 5050 boots and other stuart weitzman shoes across borders.

this has gradually made stuart weitzman realize the importance of carefully planning and developing the chinese market. if it can seize consumers in the chinese market during the brand's growth period, it can bring more growth to stuart weitzman.

on the other hand, the acquisition of stuart weitzman coincided with the transformation of coach, a brand that used to be known as an auntie bag, and wanted to become more fashionable and youthful through a series of measures. therefore, the company hired a well-known designer in the industry as the creative director, renovated products and stores, and launched a series of fashionable marketing activities for the post-90s and post-00s.

it was also during this period that international fashion and luxury brands were making a big acquisition, hoping to achieve a diversified brand strategy through acquisitions, and ultimately achieve increased revenue and global market expansion. in the affordable luxury market, coach mainly sells handbags and leather goods, while stuart weitzman focuses on high-end women's shoes. the advantage of the combination of the two is that they complement each other, leverage the existing resources of both parties to achieve synergistic growth, and consolidate their position in the global affordable luxury market.

however, judging from the results, stuart weitzman did not effectively rise to the next level after being acquired by coach. nine years later, stuart weitzman's revenue not only did not grow, but shrank further.

in the 2023/24 fiscal year, stuart weitzman's revenue fell 14% year-on-year to us$241.5 million (approximately rmb 1.718 billion), and it recorded an operating loss of us$21.2 million (approximately rmb 151 million). it is the only loss-making brand under tapestry.

stuart weitzman's global footprint has also shrunk. as of june 29, 2024, stuart weitzman will have 34 stores in north america and 60 stores overseas.

it is worth noting that stuart weitzman's overseas stores are almost all concentrated in the chinese market. as of press time, according to statistics from stuart weitzman's official website, the brand has opened 63 brand boutiques in 24 provinces and cities in china. excluding the new stores opened in china in the past two months, the number of stuart weitzman boutiques in china is approximately equal to the total number of its overseas stores.

after being acquired by coach, stuart weitzman did start expanding into the international market, especially accelerating its layout in the chinese market.

between 2015 and 2016, stuart weitzman began to open stores in many cities including beijing, shanghai, and chengdu. with the popularity of wechat, stuart weitzman also began to invest in social media marketing and digital channels in the chinese market. in order to expand its influence among young consumers and use the traffic star effect to drive performance growth, stuart weitzman appointed yang mi, who has outstanding sales ability, as the brand spokesperson in 2019.

stuart weitzman has the us as its home market and has focused its investment on developing the chinese market. in fact, it has seized the two markets with the greatest purchasing power in the global luxury industry. strategically, the brand has done nothing wrong. the key to the brand's slump may be the changes in the external macro environment and consumer behavior in recent years, and stuart weitzman's strategy for dealing with these changes has not been very effective.

the covid-19 pandemic unexpectedly swept the world in 2020, dealing a huge blow to the consumer retail industry. the top luxury brands have made a strong recovery with their high pricing strategies and enduring brand value. chinese consumers with strong purchasing power continued to buy luxury goods in 2021, driving a high double-digit growth in consumers in the local luxury industry.

at the same time, some middle-class people whose incomes were affected by the economic downturn have become more cautious and have reduced their spending on light luxury brand goods. due to the sharp decline in social activities, light luxury goods such as bags, high heels, and accessories were once rarely in demand.

the drastic changes in the macro environment have affected the entire industry, including light luxury brands such as stuart weitzman, coach, and kate spade. during this period, almost all brands are adjusting their retail networks, closing loss-making stores or adjusting store locations, and accelerating their entry into lower-tier markets.

if the impact of the epidemic on the retail market is short-term, then the changes in consumer behavior are more profound and long-term. long-term home working has caused global consumers to turn to casual and comfortable dressing. long-term home stays have also made people more yearning for outdoor sports lifestyles. this makes it increasingly difficult for women's shoe brands that sell sexy and exquisite products to do business.

according to research by management consulting firm bain, footwear is the smallest category in the personal luxury goods market in 2023, with a year-on-year growth of only 2% to 3% to 28 billion euros (about 222.5 billion yuan). in the entire footwear category, sports shoes drive the growth of the entire footwear market with a growth rate of 2% to 3%, while footwear suitable for formal occasions and special scenes has basically no growth in 2023.

it is obvious that the popular shoe brands on the market are almost all concentrated in the field of outdoor sports, such as on, salomon, asics, hoka, etc. there are also brands that are more casual and trendy, such as birkenstock, which is favored by investors. it has even collaborated with various big brands to seize the market share of traditional women's shoes with exquisite flat shoes. in 2023, birkenstock's revenue has reached 1.49 billion euros (about 11.842 billion yuan).

in the 2023/24 fiscal year (12 months ending march 30, 2024), jimmy choo achieved revenue of us$618 million (approximately rmb 4.395 billion), a decline of us$15 million (approximately rmb 107 million) from the 2023 fiscal year and basically the same as the 2022 fiscal year. at the same time, jimmy choo recorded an operating profit of us$3 million (approximately rmb 21.3339 million). in other words, jimmy choo has not achieved growth in the past three years, but has only maintained its market size and has not yet fallen into losses.

in response to changes in consumer perceptions and preferences, stuart weitzman has also adjusted its product offerings. in fiscal year 2023/24, stuart weitzman expanded its men's shoe category and launched bag accessories. at the 2023/24 fiscal year earnings conference with analysts, tapestry group executives said that stuart weitzman will further expand its casual category in fiscal year 2024/25.

stuart weitzman's core women's shoes also tend to be neutral and simple in design. in august 2024, stuart weitzman officially announced its new brand ambassador, xi mengyao. the former supermodel wore a pair of thick-soled black mid-cut boots and filmed an advertisement with a neat and cool image. the 5050 series of sexy over-the-knee women's boots that once made stuart weitzman popular around the world are hard to find.

it is a risky behavior to make major adjustments to the brand style in response to market changes. if the brand's creative design fails to impress consumers and the marketing methods fail to keep up, it may further blur the brand's image in the market. at least so far, stuart weitzman's reform strategy has not been effectively transmitted to the terminal, bringing about an improvement in the brand's performance.

stuart weitzman's dilemma also lies in the fact that once the tapestry group completes the merger with the capri group, during the internal integration process, the market performance of its original competitor jimmy choo will be more stable and excellent. moreover, jimmy choo will have a total of 234 boutiques worldwide by the end of the 2023/24 fiscal year, nearly three times that of stuart weitzman. in the extreme recession of the luxury women's shoe industry, if tapestry group wants to concentrate its resources on one brand, it is clear who it will keep.