In a rare and insightful interview, Jay Schmidt, the CEO of Caleres, sheds light on the strategic acquisition of Stuart Weitzman, a high-end footwear brand. Schmidt's vision for this acquisition is not just about adding another brand to the portfolio but about taking a bold, transformative step for Caleres.
The Perfect Fit
Schmidt believes Stuart Weitzman is an iconic brand with unique consumer relevance and a strong position in the luxury fashion footwear market. This acquisition is not a mere add-on; it's a strategic move to build a globally recognized lead brand within Caleres' portfolio.
What makes this particularly fascinating is that this is Caleres' third attempt at acquiring Stuart Weitzman. Schmidt highlights the company's improved timing, citing the development of capabilities, structure, and sourcing as key factors in their successful acquisition this time around.
International and D2C Focus
One of the key benefits of this acquisition is Stuart Weitzman's strong direct-to-consumer (D2C) and international presence. Caleres, which previously had limited international penetration, saw a significant boost with this deal, increasing its international reach by about 50%.
Stuart Weitzman's international business, particularly in China, is an interesting case study for Caleres. The brand operates wholly owned retail in China, which is a new model for Caleres, who typically operates through joint ventures. Schmidt is pleased with the progress in China, which is the largest portion of their international business.
Transition and Integration
After acquiring Stuart Weitzman, Caleres spent six months transitioning the brand's operations to their established platforms. This involved shedding excess inventory and reassembling teams in St. Louis and Asia. The transition was seamless, with the brand physically and digitally moving into Caleres' systems and showroom, located in the same building as Sam Edelman.
Organizational Changes
As Caleres worked through old inventory, they also made changes to Stuart Weitzman's organizational structure to eliminate duplicative costs. This involved integrating the brand into Caleres' sourcing, logistics, marketing, planning, costing, finance, and digital capabilities. These changes provide synergistic control and allow the brand to move faster without compromising consumer experience.
Product Focus
Caleres is focused on building out Stuart Weitzman's assortment and strengthening its sourcing capabilities. While committed to the brand's sourcing structure in Spain, which accounts for two-thirds of the business, Caleres is exploring other manufacturing hubs to expand categories. For instance, they've started making sneakers in Asia, which has resonated well with consumers in Asia and the US.
New Leadership and Financial Stability
Jonathan Lelonek, with his deep industry experience in luxury and contemporary footwear, was named brand president when Caleres acquired Stuart Weitzman. His mandate was to get the brand on firm ground and ensure a smooth transition. Schmidt is confident about the future, believing that Caleres can bring Stuart Weitzman to break-even this year and restore it to profitability thereafter.
Long-Term Ambitions
Schmidt's long-term vision for Stuart Weitzman involves strengthening gross margin, improving inventory control, elevating execution across all channels, and stabilizing international performance. He believes the brand can return to growth and contribute operating margins comparable to the rest of Caleres' brand portfolio. The growth strategy includes a disciplined architecture and product, sharper storytelling, improved digital execution, expanded international reach, and renewed wholesale partnerships.
As Caleres celebrates Stuart Weitzman's 40th anniversary later this year, it presents an important opportunity to reintroduce the brand globally, celebrate its heritage, and signal the next chapter of its journey.
