Accessible Luxury handbag company Kate Spade & Co is up for sale, and according to market reports, fellow competitors Michael kors and Coach are waiting in line to buy the label. The question on everyone’s lips is, which company is best positioned to make the acquisition? As both brands are struggling with a stagnating global handbag market. Does the deal even make any sense for either one of them?
Kate Spade decided to put the company up for sale after US hedge fund Caerus Investors urged the brand to consider selling. This came as a result of the brand’s inabily to achieve comparable profit margins in comparison to its rivals, Kate Spade’s gross profit margin was 59.4 percent, compared to 69.8 percent for Coach over the same period.
Acquiring Kate Spade will actually aid the growth of Kors and Coach, but there are other factros to consider, the declining department store sales, amd the stagnating global sales of handbags. It has been reported that Coach is better equipped to buy the brand as Michael Kors has made no acquisiytions in the past, and the former is doing better financially in the market. But it will still be a good way to expand both brands, only time will tell.