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Coach buys Kate Spade for $2.4 billion
Coach to buy Kate Spade!
Coach-the luxury handbag maker has announced plans to buy competitor Kate Spade in a deal worth $2.4 billion.
Now, the problem that lies here is that shoppers are not too happy about this collaboration, since, Kate Spade and Coach have very distinctive styles.
Kate Spade is prized as a whimsical brand with accessories and Ready To Wear rife with stripes, polka dots, bright colours — and even handbags shaped like small animals. What's more, while the company's logo is small and sleek, they take pride in writing fun words and phrases across everything from tote bags to dishware.
Coach, on the other hand, is lauded for being the ultimate classic leather brand and also known for their luxurious tracksuits. Even more, lately they've been positioning themselves further into the luxury market, opting for striking bag shapes made of luxurious leather and other high-end materials and ridding most styles of logos.
The good news for shoppers, however, is that Coach said it expects the transaction to close by the end of the third quarter. It plans to preserve Kate Spade's (KATE) "brand independence" and retain key staff.
Mickey Chadha, an analyst at Moody's, said the purchase is the latest effort by Coach to "broaden its customer base to a younger, trendier millennial shopper."
That should help boost profitability, but it's bad news for purse-loving bargain hunters.
What do you guys think of this deal? Comment below and let us know!
