Coach Acquires Kate Spade For $2.4 Billion

Coach will buy handbag and accessories brand Kate Spade for $2.5 billion, an acquisition already approved by both boards of directors. 

Coach CEO Victor Luis said he planned to "unlock Kate Spade's largely untapped global growth potential" and that the acquisition provides "an additional vehicle for driving long-term, sustainable growth.” The purchase also gives Coach a prestige brand with a strong Millennial following and potential to capitalize on recent success expanding into lifestyle categories like home furnishings. 

Coach is also focused on its own brand, with a strategy of running fewer promotions and pulling out of discounting department stores like Macy's and Lord & Taylor. The company will employ the same strategy with Kate Spade by reducing online flash sales and its wholesale presence.

Kate Spade is the second major acquisition by Coach, who bought designer shoe brand Stuart Weitzman in 2015.