Mar 27, 2019 | By Volker Ketteniss
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Coach has announced it has signed a definitive agreement to acquire Kate Spade & Company for a total transaction value of $2.4bn. The transaction represents a 27.5% premium to the closing price of Kate Spade’s shares at the end of last year before media speculation of a transaction.
Coach CEO Victor Luis said: “Kate Spade has a truly unique and differentiated brand positioning with a broad lifestyle assortment and strong awareness among consumers, especially Millennials. Through this acquisition, we will create the first New York-based house of modern luxury lifestyle brands, defined by authentic, distinctive products and fashion innovation.
“In addition, we believe Coach’s extensive experience in opening and operating specialty retail stores globally, and brand building in international markets, can unlock Kate Spade’s largely untapped global growth potential. We are confident that this combination will strengthen our overall platform and provide an additional vehicle for driving long-term, sustainable growth.”
Kate Spade CEO Craig A Leavitt added: “Following a thorough review of strategic alternatives, reaching an agreement to join Coach’s portfolio of global brands will maximise value for our shareholders and positions Kate Spade for long-term success as we continue our evolution into a powerful, global, multi-channel lifestyle brand.”
They see $50m of cost synergies within three years and plan to reduce sales in Kate Spade’s wholesale channel and online flash sales channels.
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