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Coach's Kate Spade Purchase Buys a Bagful of Millennials

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The $298 "cameron street jardin byrdie" (katespade.com)

By    |   Tuesday, 09 May 2017 05:21 AM

Coach's Kate Spade purchase for $2.4 billion announced on Monday will give the luxury accessories seller a new bagful of prized millennials.

Kate Spade, an upscale retailer, will be kept an independent brand, reported USA Today. Some 60 percent of Kate Spade's customers are millennials, a group Coach is attempting to appeal to.

Kate Spade has 133 specialty stores, 82 outlet stores and 54 stores similar to franchises exclusively in foreign markets. It opened 52 new stores in 2016, which helped increase net income and overall sales.

"Kate Spade has a truly unique and differentiated brand positioning with a broad lifestyle assortment and strong awareness among consumers, especially millennials," said Victor Luis, chief executive officer of Coach. "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.

CNBC reported that the $18.50 per share cash offer represents a premium of nine percent to Kate Spade's closing price on Friday. Shares of Kate Spade were eight percent higher Monday morning following the announcement, while Coach's stock rose six percent.

"Following a thorough review of strategic alternatives, reaching an agreement to join Coach's portfolio of global brands will maximize 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," said Craig A. Leavitt, chief executive officer of Kate Spade.

The Coach deal for Kate Spade is expected to close in the third quarter of 2017, according to CNBC.

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Coach's Kate Spade purchase for $2.4 billion announced on Monday will give the luxury accessories seller a new bagful of prized millennials.
coach, kate spade, purchase
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2017-21-09
Tuesday, 09 May 2017 05:21 AM
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