Kate Spade, an American Fashion Design house that sells handbags, jewelry and clothing, is being bought by their rival, Coach.
Rumors were spurring about the deal, in an attempt for Coach to attract millennials and deal is to close in the third quarter of 2017, said NPR.
In a press release, Coach’s CEO, Victor Luis, stated “Kate Spade has a truly unique and differentiated brand positioning with a broad lifestyle assortment and strong awareness among consumers, especially millennials.”
In an attempt to make the company more into a luxury brand and take off the reputation of a discount brand Coach hasn’t done as much promotional sales and even pulled away itself out of department stores like Macy’s.
CNBC described that in a “definitive agreement” Coach bought company Kate Spade for $2.4 billion or $18.50 a share.
According to CNN Money, Coach said that by combining the stores firm’s inventory management and supply chains they should save money and raise about $50 million in annual savings.
To improve its sales, Coach got a new shoe maker ‘Stuart Weitzman’ and even plans to go overseas to other countries.
The company has seen a raise in stocks NPR reported, that “Kate Spade’s stock rose more than 8 percent as of midafternoon trading Monday, while Coach’s rose just less than 5 percent,” and their stock prices have also raised.