For months, there have been rumors that Coach was interested in buying Kate Spade. Today, Coach announced that it has inked a $2.4 billion deal to acquire the brand. In 2015, Coach acquired shoe brand Stuart Weitzman, prompting speculation that the company was interested in creating an American luxury brand empire akin to LVMH.
The acquisition makes sense. Over the last few years, the Coach brand was diluted as product quality went down and products were sold at increasingly low prices, and in a wide range of retail outlets. These are problems that Kate Spade has also faced. In recent months, in a series of events that I describe in this story, Coach has staged a turnaround, bringing on a new CEO, Victor Luis, and creative director, Stuart Vevers, to rejigger the brand. Coach is likely to apply lessons from this process to Kate Spade.
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