Coach said it would buy Kate Spade for $2.4 billion as it look to tap the popularity of Kate Spade's satchels and totes among millennials. (About 60% customers of KS are millennials) The offer was $18.50 per share, a 9% premium from Kate Spade's Friday close. KS got >15% of its sales outside NA.
Kate Spade has been struggling to live up to market expectations amid fierce competition, and a decline in the retailing sector. This acquisition is in tune with Coach's turnaround strategy, which includes limiting discounts and distribution to regain its brand cachet.
HF Caerus Partners has urged KS to sell itself last November. The deal is not subjected to any financing condition. Banks involved: Evercore for Coach; Perella Weinberg for Kate Spade.
Thoughts: I know quite a few people who Coach bags for the brand name and their cheap prices (yes there are a lot of cheap Coach handbags on the market because of discounts). Their strategy on cutting discounts and regaining brand name seems to be correct. A millennial myself, almost every girl I know has a Kate Spade bag. Not exaggerating. The retail business is withering (Macy, Neiman Marcus, etc.) and those fashion brands highly depend on stores and shopping malls for a good number of sales. How are they going to get more customers?
You're gay.
Lol....no...
eCommerce channels
Is this post a play for SB's?
who are the SB's ?
SB = Silver Bananas
oh okay. Thx
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