Confirmed: Coach To Buy Kate Spade For $2.4 Billion

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(Above photo): Coach 1941 Fall 2017 at New York Fashion Week.

Last week, DM Fashion Book reported that American multinational luxury fashion company Coach, Inc. could soon be the next LVMH or Kering. The brand wants to transition into a sort of mini-conglomerate, along the lines of French multinational luxury goods conglomerate LVMH and Kering SAFrench luxury goods holding company owner of Alexander McQueen, Balenciaga, Brioni, Gucci, Puma, Volcom, Saint Laurent Paris, and other luxury brands (see it here).

Coach brought luxury goods company shoemaker Stuart Weitzman in January 2015 for more than $500 million in cash. Coach was said to also have explored purchasing New York-based brands Diane von Furstenberg and Rebecca Minkoff, the latter of which sold a minority stake to private equity firm TSG Consumer Partners in 2012. (Coach declined to comment.)

In January of 2o17, DM Fashion Book reported that Kate Spade New York is ups for grabs. We also mentioned that Coach and American fashion brand and designer Michael Kors are interested in purchasing the American fashion design house, which was founded by Kate Spade and Andy Spade in 1993 (see our original story here). Back then, the two companies’ broads were conversing the feasibility of going ahead with a bid. Two months later (March 2017), we reported that “Coach’s acquisition of Kate Spade could be announced soon (see it here).

After months of speculations, Coach is set to buy Kate Spade. In a new announcement, Coach has revealed that the deal is expected to close in the third quarter of 2017.

What we are doing is creating the first New York-based house of modern luxury lifestyle brands,” said Coach Inc. chief executive Victor Luis to BoF, hours after the company announced the acquisition of Kate Spade & Company for $2.4 billion. “Kate Spade’s shares rise by 17 percent, Coach Inc. made good on its promise to continue to expand the company beyond its namesake brand, positioning it as the new fashion conglomerate to watch — and Luis as a new power player in American fashion.”

What is attractive to us about Kate Spade is that it is not overly distributed,” explained Luis, describing that brand as less susceptible to department store struggles. “It has a very clean wholesale distribution in North America and it has a very clean distribution globally. And that means tremendous opportunity for growth as we help them drive their business.”

Luis sees Coach’s cooler New York “fashion attitude,” as distinctive from Kate Spade’s positioning. “Kate Spade plays much more on whimsy and fun, and much more on its lifestyle positioning with a very broad array of products within its store concept, and attracts an especially stronger millennial consumer,” he said.

We also see the strength of the Kate Spade relationship with millennials through the strength of their digital engagement,” added Luis.

Head over to BoF to read more!

(Above photo): Coach 1941 Fall 2017 at New York Fashion Week.

(Above photo): Coach 1941 Fall 2017 at New York Fashion Week.

(Above photo): Coach 1941 Fall 2017 at New York Fashion Week.

(Above photo): Coach 1941 Fall 2017 at New York Fashion Week.

(Above photo): Coach 1941 Fall 2017 at New York Fashion Week.

Photos Credit: Umberto Fratini / indigital.tv

Source: BoF

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Donovan

Donovan is the CEO and Founder of www.dmfashionbook.com. For all general inquiries please email don@dmfashionbook.com Donovan has a BA in Journalism & Media Studies from the prestigious Rutgers University. He's currently studying entertainment and fashion law.