Coach and Michael Kors are reportedly interested in acquiring Kate Spade as the brand is set to hold a formal auction as soon as this month.
According to an article on Bloomberg, Coach and Michael Kors are interested in acquiring Kate Spade & Co. Coach and Michael Kors are reportedly in talks with their boards about possibly offering a bid.
Kate Spade is set to hold a formal auction as soon as this month. Other luxury brands outside the U.S. are interested in purchasing the brand as well, according to sources with knowledge of the talks. A total of six brands are said to be interested in acquiring Kate Spade.
Talks are still being held, however, and no final decisions have been made.
As of December, Kate Spade began working with a bank to see if any other brands would be interested in buying. Talk of possible acquisition “has swept the luxury industry in the past year as designers look for ways to overcome sluggish mall sales, markdowns from excess inventory and fewer purchases from tourists,” according to Bloomberg.
Handbag sales declined last year in the U.S. along with department store sales as customers favor shopping online. Lower spending by tourists has also made sales decline. As such, brands like Coach and Michael Kors are lowering their inventory in department stores and looking for deals with other brands.
Coach, which recently acquired luxury shoe brand Stuart Weitzman, made several bids to buy Burberry but was rejected.
Kate Spade reported declining same store sales in late 2016 and said earnings would decline during the holiday season.
Coach, Michael Kors, and Kate Spade declined to comment.
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