News has come out of Reuters today that Coach Inc. has purchased Kate Spade & Co for $2.4 billion in an effort to capitalize on Kate Spade’s popularity with millennial shoppers.
Although Kate Spade’s shares continue to rise and the brand has been consistently popular with millennial shoppers, most mid-level luxury handbag makers are experiencing fiercer competition and a lack of department store sales.
It was in Coach’s best interest to acquire a younger more interesting competitor to reach new customers and to own a larger piece of the mid-level luxury market.
If you are a fan of Kate Spade, expect it to be a little harder to get your hands on as Coach plans to limit discounts and limit access to the brand in department stores, hopefully increasing both Coach and Kate Spade’s luxury appeal.