American fashion house Kate Spade& Co has been bought over by competitors Coach. Founded by Kate and Andy “Spade” in 1993, with the upper middle class as their customer target. Kate Spade was first sold to The Neiman Marcus Group in 1999 then apparel giant Liz Claiborne Inc. bought the company over in 2006 for about $124 million.
11 years after being bought by Liz Claiborne, the brand has over 180 stores around the world and selling in over 400 outlets around the world. Over the years the household name included home decor, beddings, shoes, beauty products, perfume, pajamas, and eye-wear clothing to their name. The Kate Spade brand is now worth $2.4 billion.
But like other luxury handbag maker the brand has struggled to live up to market expectations amid fierce competition.
News of the sale first came out in December after the Wall Street Journal reported that Kate Spade had started looking for a potential buyer after shareholders said a larger company could help the brand grow faster.
It’s Goodbye to mind blowing sales offers, since Chief executive of Coach Victor Luis on Monday said, one of the changes that will occur would be to cut back on online flash sales and deep discounts on Kate Spade goods.
“These channels are profitable and can drive growth,” he said but warned that “they can lead to brand deterioration over time.”
The news of the merge hasn’t gone down well with some consumers, obviously because of the difference in style between Kate Spades, colorful prints, patterned styled products which appeals to the minimalists as opposed to Coach’s conservative designs, patterns and prints. We do hope the new merge will bridge the gap between the two absolutely different brands.