Irving Place Capital Partners has agreed to sell its 55% stake in women’s footwear maker Stuart Weitzman Holdings LLC to Jones Apparel Group Inc. (NYSE: JNY) for around $180 million in cash. Stuart Weitzman will retain the other 45% ownership position.
Jones Apparel Group, Inc. (“Jones”) (NYSE: JNY) today announced that it has entered into an agreement to acquire Stuart Weitzman Holdings, LLC (“Stuart Weitzman, LLC”), a privately-held leading designer and manufacturer of women’s salon footwear and accessories. Stuart Weitzman, LLC markets its products in fine specialty and department stores worldwide and in its own chain of retail stores in the U.S. and abroad. Stuart Weitzman, LLC realized net revenues of approximately $193 million for the year ended January 2, 2010.
Under the terms of the agreement, Jones will make initial cash payments of approximately $180 million to selling shareholders, including Irving Place Capital, for a 55% interest in Stuart Weitzman, LLC. Stuart Weitzman will be the principal owner of the remaining 45% interest. The selling shareholders will receive cash payments for their remaining interest at the end of 2012, based upon the value of Stuart Weitzman, LLC at that time in accordance with a contractually pre-determined formula.
Over the last five years, Stuart Weitzman, LLC has experienced significant growth, including adding 20 full-priced stores and opening its first five outlet stores domestically. During the same time period outside the U.S., Stuart Weitzman, LLC opened its first seven stores, including flagship stores in Rome and Milan, while further expanding its global footprint with the opening of 19 incremental licensed stores. Stuart Weitzman will continue as Executive Chairman of Stuart Weitzman, LLC and together with Wayne Kulkin, President of Stuart Weitzman, LLC, and their management team, remains fully committed to the growth of the business.
Jones will finance the transaction with cash on hand or other alternative financing. The acquisition is expected to be accretive to earnings per share, exclusive of any required purchase accounting adjustments, and is anticipated to close within 30 business days, subject to customary closing conditions, including expiration of the Hart-Scott-Rodino Antitrust waiting period.
Wesley Card, Chief Executive Officer, Jones Apparel Group, said, “The Stuart Weitzman business represents an excellent addition to our existing portfolio of branded footwear and accessories and is an ideal complement to our designer and contemporary businesses.”
Mr. Card added: “With a world renowned business and notable brand recognition, Stuart Weitzman’s shoes and handbags reach a loyal customer base that spans across generations. Our goal of providing strong brands and quality products to a wide range of consumers is furthered by having Stuart Weitzman, LLC join our company. Together, with our expertise in execution and sourcing, Stuart Weitzman, LLC will continue to expand its reach as a leader in the upscale footwear market. We welcome Stuart, Wayne and their entire team to Jones.”
Stuart Weitzman said: “Irving Place Capital has been a great partner, helping us to build Stuart Weitzman into a successful, compelling, global brand. Together, we determined that the time was right to take the company to the next level by teaming up with Jones. Jones has the resources to scale the business to maximize future growth and a rich history of understanding and supporting the entrepreneurial nature of its various businesses. I am extremely confident that, because of its appreciation of our brand vision, we have found a strategic partner to help us maximize our growth opportunities. We look forward to collaborating with Jones and leveraging its strong infrastructure to help us improve our service and expand our product mix to an even broader consumer base worldwide.”
“Our relationship with Stuart Weitzman has been a successful and fulfilling partnership,” said Rick Perkal, Senior Managing Director, Irving Place Capital. “Stuart Weitzman, LLC is well positioned for continued success and growth as part of Jones.”
The financial adviser to Jones was Goldman, Sachs & Co. The financial adviser to Stuart Weitzman, LLC was Financo, Inc.
About Stuart Weitzman Holdings, LLC
For over 30 years, Stuart Weitzman has been designing shoes for the modern, sophisticated woman. Today, Stuart Weitzman Holdings, LLC is a leading designer, manufacturer, wholesaler and retailer of premium women’s shoes and handbags in approximately 60 countries. Made famous by his trademark use of unique materials and keen attention to detail, Stuart Weitzman currently owns and operates 38 retail stores in the U.S., 7 stores internationally and provides exclusive licenses to 29 retailers to operate the Stuart Weitzman stores outside of the United States.
About Jones Apparel Group, Inc.
Jones Apparel Group, Inc. (“the Company”) (www.jonesapparel.com) is a leading designer, marketer and wholesaler of branded apparel, footwear and accessories. The Company also markets directly to consumers through its chain of specialty retail and value-based stores and through its e-commerce web sites. The Company’s nationally recognized brands include Jones New York, Nine West, Anne Klein, Gloria Vanderbilt, Kasper, Robert Rodriguez, Bandolino, Easy Spirit, Evan-Picone, l.e.i., Energie, Enzo Angiolini, Joan & David, Mootsies Tootsies, Sam & Libby, Napier, Judith Jack, Albert Nipon and Le Suit. The Company also markets costume jewelry under the Givenchy brand licensed from Givenchy Corporation, women’s footwear under the Dockers® and Dockers® Women brands and infants’, toddlers’ and boys’ footwear (excluding girls’ footwear) under the Dockers® and Dockers® Premium brands, licensed from Levi Strauss & Co., apparel and accessories under the Rachel Roy brand licensed from Rachel Roy IP Company, LLC, and Jessica Simpson jeanswear licensed from VCJS LLC. Each brand is differentiated by its own distinctive styling, pricing strategy, distribution channel and target consumer. The Company contracts for the manufacture of its products through a worldwide network of quality manufacturers. The Company has capitalized on its nationally known brand names by entering into various licenses for several of its trademarks, including Jones New York, Anne Klein New York, Nine West, Gloria Vanderbilt, l.e.i. and Evan-Picone, with select manufacturers of women’s and men’s products which the Company does not manufacture. For more than 30 years, the Company has built a reputation for excellence in product quality and value, and in operational execution.
About Irving Place Capital
Irving Place Capital invests private equity capital in compelling buyouts, recapitalizations and growth capital opportunities alongside superior management teams. Irving Place Capital focuses on making control or entrepreneur-driven investments. Since its formation in 1997, Irving Place Capital has been an investor in 68 portfolio companies, and manages over $4 billion of equity capital, including its current $2.7 billion institutional fund. More information about Irving Place Capital is available at www.irvingplacecapital.com.