Coach just put out some major coin for its latest purchase: Kate Spade!
The company dished out $2.4 billion, with their eyes specifically on their millennial demographic.
“It is a strong brand with a clear and consistent positioning, with leadership in the attributes of fashionable, fun and feminine, and a growing share of Millennials,” Coach’s CEO Victor Luis said.
We hear Kate Spade will contribute to operate as an independent brand with their own stores.
Via USA Today: Investors in both companies cheered the deal. Coach is paying $18.50 per share for Kate Spade, 27.5% more than the stock was worth on Dec. 27, before rumors of a possible deal surfaced. Kate Spade share closed up Monday at $18.38, up $1.41 or 8.3%. Coach shares closed at $44.71, up $2.05 or 4.1%.
Coach said it expects to shed $50 million in annual costs within three years after completing the deal. That will include “supply chain optimization” and elimination of overlapping costs, Chief Financial Officer Kevin Wills said. Coach ended the period with 228 retail stores and 204 outlet stores in North America, 522 Coach locations internationally and 75 Stuart Weitzman stores.
Source: USAToday, https://www.google.com/amp/amp.usatoday.com/story/101422114/
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