When the news broke on Monday, a representative from the popular luxury brand [Coach] released the following statement:
“The acquisition of Kate Spade is an important step in Coach’s evolution as a customer-focused, multi-brand organization. We believe 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.” -Victor Luis [Chief Executive of Coach]
Under the deal, Luis also revealed that Kate Spade will still have creative control over the design/marketing of their products. However, he felt that they had become way to dependent on “whole-sales” and online distribution.
“Those channels can lead to meaningful brand deterioration over time, and Coach plan to cut back on both. Coach is expected to shed $50 million in annual costs within three years after completing the deal. That will include ‘supply chain optimization’ and elimination of overlapping costs.”
While increasing the ‘Kate Spade’ brand, lovers of ‘Coach’ can’t help but to notice that they’ve been closing most of their North America stores. To date, a total of 30 stores have been closed!
Talk About High In Demand!
Even though most have an issue with the deal, the CEO of Kate Spade, Craig Levitt seems to think that it’s the best one they’ve made yet!
“The deal will allow the brand to achieve long-term success after working hard to create a clear and distinct brand identity, differentiated storytelling and great products.”
Luxury brand shoppers….. We’d like to know your thoughts!
With a $2.4 billion buy out, we’re not sure how LONG Kate Spade will have that ‘creative control’ ……