Coach has signed an agreement to buy Kate Spade & Co. for US$2.4 billion. The acquisition is expected to strengthen both companies by combining their expertise in handbag design, merchandising, supply chain and retail operations.
Both companies are based in New York, and are each known for their handbags. Coach references its rich heritage through exceptional leathers and innovative designs, while Kate Spade is more playful, using crisp colour and graphic prints across its stable of brands.
Victor Luis, chief executive officer of Coach, Inc. praised Kate Spade’s appeal to Millennials in his statement about the merger.
“Kate Spade has a truly unique and differentiated brand positioning with a broad lifestyle assortment and strong awareness among consumers, especially Millennials,” he says. “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.”
Coach has a store on Auckland’s Queen St – one of around 520 international locations. There’s also a concession stand in T Galleria on Albert St, in keeping with Coach’s department store and specialty retail strategy around the world. Over the last year, the company has been working on reducing its retail exposure recently in order to preserve brand integrity – Fortune reported at the end of 2016 that it had exited some 250 US department stores to focus on the best-performing retail locations and its own stores.
Kate Spade is also sold through a concession at Auckland’s T Galleria.