UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of
report (Date of earliest event reported): May 4, 2015
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Coach,
Inc.
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(Exact
name of registrant as specified in its charter)
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Maryland
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1-16153
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52-2242751
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(State of Incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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516 West 34th Street, New York, NY 10001
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(Address
of principal executive offices) (Zip Code)
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(212) 594-1850
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(Registrant’s telephone number, including area code)
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Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.01 Completion of Acquisition or Disposition of Assets.
As previously disclosed, on January 5, 2015, Coach, Inc. (“Coach”)
entered into a Purchase Agreement (the “Purchase Agreement”) with Stuart
Weitzman Topco LLC (“Topco”) and Stuart Weitzman Intermediate LLC
(“Stuart Weitzman”), a wholly owned subsidiary of Topco. On May 4,
2015, Coach, through its wholly owned subsidiary, completed the
acquisition of all of the equity interests of Stuart Weitzman, a luxury
footwear company and the parent of Stuart Weitzman Holdings, LLC, from
Topco (the “Closing”) for approximately $530 million in cash, subject to
customary post-closing purchase price adjustments. In addition, under
the terms of the Purchase Agreement, Coach agreed to pay a potential
earnout of up to $14.66 million annually in cash over the next three
calendar years if the following revenue targets are met:
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Year
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Target
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2015
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$350 million
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2016
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$385 million
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2017
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$425 million
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The Purchase Agreement also contains a catch-up provision that provides
that if the revenue targets are missed in any one year but are surpassed
in succeeding years then amounts for past years become due upon
surpassing targets in succeeding years. Therefore, if the targets are
met each year (or, for example, met only in the year 2017) the earnout
payments would be $44 million in total.
Both Mr. Stuart Weitzman and Wayne Kulkin, the current Executive
Chairman and Chief Executive Officer of Stuart Weitzman Holdings, LLC
respectively, have agreed to remain with Stuart Weitzman following the
transaction.
As previously disclosed, on January 5, 2015, Coach entered into a
letter agreement (the “Letter Agreement”) with Mr. Weitzman. Pursuant
to the terms of the Letter Agreement, Mr. Weitzman paid $2.5 million to
Coach at the Closing. Under the terms of the Letter Agreement, Mr.
Weitzman also agreed to pay $666,667 to Coach each year in which the
earnout described above is payable by Coach. The Letter Agreement also
contains a catch-up provision; therefore, if the earnout target is met
only in the year 2017 (or, if the earnout targets are met each year) the
payment to Coach would be $2 million in total.
The summary descriptions of the Purchase Agreement and the Letter
Agreement in this Item 2.01 do not purport to be complete and are
qualified in their entirety by reference to the full text of the
Purchase Agreement and the Letter Agreement which were filed on February
4, 2015 as exhibits to Coach’s quarterly report on Form
10-Q. Interested parties should read the Purchase Agreement and the
Letter Agreement in their entirety.
Item 8.01 Other Events.
On May 4, 2015, Coach issued a press release announcing the completion
of the transactions contemplated by the Purchase Agreement. A copy of
the press release is attached hereto as Exhibit 99.1 and is incorporated
herein by reference.
This document contains forward-looking statements based on management’s
current expectations. These statements can be identified by the use of
forward-looking terminology such as “may,” “will,” “should,” “expect,”
“intend,” “ahead,” “estimate,” “on track,” “to be,” “on course,”
“forward to,” “future,” “to lead,” “provide,” “to help,” “to
delivering,” “to benefiting,” “to advancing,” “believe,” “remains,” “to
reinvigorate,” “to achieve,” “to enable,” “to realize,” “return to,” “to
acquire,” “to execute,” “are positioned to,” “continuing to,”
“trajectory,” “potential,” “project,” “guidance,” “target,” “forecast,”
“anticipated,” or comparable terms. Future results may differ materially
from management’s current expectations, based upon risks and
uncertainties such as expected economic trends, the ability to
anticipate consumer preferences, the ability to control costs,
etc. Please refer to Coach’s latest Annual Report on Form 10-K, its
Quarterly Report on Form 10-Q for the quarterly period ended December
27, 2014 and its other filings with the Securities and Exchange
Commission for a complete list of risks and important factors.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1 Text of Press Release, dated May 4, 2015
SIGNATURE
Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated:
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May 4, 2015
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COACH, INC.
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By:
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/s/ Todd Kahn
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Todd Kahn
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Global Corporate Affairs Officer, General
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Counsel & Secretary
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EXHIBIT INDEX
99.1
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Text of Press Release, dated May 4, 2015
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Exhibit 99.1
Coach
Completes Acquisition of Luxury Designer Footwear Brand Stuart Weitzman
NEW YORK--(BUSINESS WIRE)--May 4, 2015--Coach, Inc. (NYSE:COH)
(SEHK:6388), a leading New York design house of modern luxury
accessories and lifestyle collections, today announced that it has
completed the acquisition of Stuart Weitzman Holdings LLC, a leading
designer and manufacturer of women's luxury footwear from private equity
firm Sycamore Partners. This transaction complements Coach’s current
global leadership position in premium handbags and accessories, while
immediately contributing to the company’s earnings as Coach continues to
make meaningful progress against its brand transformation announced
earlier this year.
Stuart Weitzman markets its products in fine specialty and department
stores worldwide and in its own retail stores in the U.S. and Europe.
Stuart Weitzman realized net revenues of $313 million for the twelve
months ended December 31, 2014.
Stuart Weitzman is continuing as Creative Director and Executive
Chairman of Stuart Weitzman Holdings LLC, and together with Wayne
Kulkin, Chief Executive Officer of Stuart Weitzman, and their management
team, remains fully committed to the growth of the business.
At the deal closing, Coach made initial cash payments of approximately
$530 million to Sycamore Partners. In addition, Coach will make up to
$44 million in contingent payments to Sycamore Partners upon the
successful achievement of selected revenue targets over the three years
following the closing of the acquisition.
Coach financed the transaction with cash on hand. The acquisition is
expected to be accretive to earnings per share, exclusive of
transaction-related charges including anticipated purchase accounting
adjustments and contingent payments related to the transaction.
About Coach, Inc.
Coach, established in New York City in 1941, is a leading design house
of modern luxury accessories and lifestyle collections with a rich
heritage of pairing exceptional leathers and materials with innovative
design. Coach is sold worldwide through Coach stores, select department
stores and specialty stores, and through Coach’s website at www.coach.com.
Coach’s common stock is traded on the New York Stock Exchange under the
symbol COH and Coach’s Hong Kong Depositary Receipts are traded on The
Stock Exchange of Hong Kong Limited under the symbol 6388.
About Stuart Weitzman Holdings LLC
Stuart Weitzman, a legendary designer and manufacturer of women’s luxury
footwear, operates 46 retail stores across the United States, including
New York, Beverly Hills, Chicago, Boston and Las Vegas. The company also
has 67 international stores including eight directly operated locations,
19 global shop-in-shops, and e-commerce sites in the United States,
Canada, Europe and Hong Kong. Stuart Weitzman footwear and accessories
are sold in more than 70 countries.
A luxury brand built upon the idea of creating a beautifully-constructed
shoe, Stuart Weitzman’s main objective has always been to merge fashion
and function. The award-winning styles created by founder and designer
Stuart Weitzman are engineered to feel as good as they look, and to look
as good as they feel.
Neither the Hong Kong Depositary Receipts nor the Hong Kong
Depositary Shares evidenced thereby have been or will be registered
under the U.S. Securities Act of 1933, as amended (the “Securities
Act”), and may not be offered or sold in the United States or to, or for
the account of, a U.S. Person (within the meaning of Regulation S under
the Securities Act), absent registration or an applicable exemption from
the registration requirements. Hedging transactions involving these
securities may not be conducted unless in compliance with the Securities
Act.
This press release contains forward-looking statements based on
management’s current expectations. These statements can be identified by
the use of forward-looking terminology such as “may,” “will,” “should,”
“expect,” “intend,” “ahead,” “estimate,” “on track,” “to be,” “on
course,” “forward to,” “future,” “to lead,” “provide,” “to help,” “to
delivering,” “to benefiting,” “to advancing,” “believe,” “remains,” “to
reinvigorate,” “to achieve,” “to make,” “to enable,” “to realize,”
“return to,” “to acquire,” “to execute,” “are positioned to,”
“continuing to,” “trajectory,” “potential,” “project,” “guidance,”
“target,” “forecast,” “anticipated,” or comparable terms. Future results
may differ materially from management’s current expectations, based upon
risks and uncertainties such as expected economic trends, the ability to
anticipate consumer preferences, the ability to control costs, etc.
Additional risks and uncertainties related to the transaction include
the following (i) the risk that the transaction disrupts current
operations, (ii) the risk that anticipated synergies and opportunities
as a result of the transaction will not be realized, (iii) difficulties
or unanticipated expenses in integrating Stuart Weitzman into Coach;
(iv) the risk that Stuart Weitzman does not performed as planned
following the acquisition including that Stuart Weitzman will not
achieve anticipated revenue targets; and (v) potential difficulties in
employee retention following the consummation of the transaction. Please
refer to Coach’s latest Annual Report on Form 10-K, our Quarterly Report
on Form 10-Q for the quarterly period ended December 27, 2014 and its
other filings with the Securities and Exchange Commission for a list of
additional risks and important factors.
CONTACT:
Coach:
Analysts & Media:
Andrea Shaw Resnick,
Global Head Investor Relations & Corporate Communications
212/629-2618
or
Christina
Colone, Director, Investor Relations
212/946-7252
or
Stuart
Weitzman:
Karen Ferko, Executive Vice President of Global
Communications
212/287-0671
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