Coach acquires Kate Spade & Company for a total transaction value of $2.4 billion (€2,18 billions). The company has announced on May the 8th the signature of the definitive agreement. The combination of the two brands give birth to a third luxury pole that aims to compete with the European giants LVMH Moët Hennessy Louis Vuitton and Kering.
Both brands have a great appeal on aspirational consumers because of their relatively affordable prices. “The acquisition of Kate Spade is an important step in Coach’s evolution as a customer-focused, multibrand organization – said Chief Executive Officer of Coach Inc. Victor Luis in a statement on Monday. The two companies offer a combination of men’s wear, ready-to-wear fashion, accessories, fragrances and homeware. Through this acquisition, Coach expand its portfolio to get more chances to stand out from the crowded arena of premium and runner-up players of the luxury market.
“Kate Spade has a truly unique and differentiated brand positioning with a broad lifestyle assortment and strong awareness among consumers, especially millennials. Through this acquisition Coach will create the first New York-based house of modern luxury lifestyle brands“- said Luis.
A strong statement that underlies how Coach is running up to create a third luxury pole to compete with the European giants LVMH Moët Hennessy Louis Vuitton and Kering, with some differences: its 100% American Heritage (Coach, Stuart Weizmann, Kate Spade) and its relatively affordable price (an aspect of the luxury industry which is very much discussed among the industry and that has some consequences: see story). The acquisition goes in this direction if we consider also the latest rumors on Jimmy Choo acquisition by Coach itself.
Coach has been analyzed by our Digital Competitive Map 17 and it stands out for the broaden Digital Customer Experience it is able to offer; as a matter of fact, their CEO Victor Luis stated that “Coach’s extensive experience in opening and operating specialty retail stores globally, and brand building in international markets, can unlock Kate Spade’s largely untapped global growth potential. In addition Kate Spade brand will benefit from Coach’s supply chain and strong corporate infrastructure”. Moreover, the combination of the two brands enhances the position of Coach inc. in the global premium handbag and accessories, footwear and outerwear categories, bringing product, brand positioning and customer diversification to the portfolio”.
It will be very interesting to discover how Coach will move in the quadrant of the next edition 2018 of the Digital Competitive Map: you can wait one year or ask us for a brand assessment included in our Premium Pack.
(photo credits katespade.com)