After a letter sent on November 14, in which the board by one of the minority shareholders (the hedge fund Caerus Investors) urged management to find a buyer, Kate Spade has entrusted negotiations with an investment bank. Since Christmas, a lot of potential buyers names have circled among the people in the know. As a result, the share price had seen the + 23% rebounds even on days when the Dow Jones recorded declines. Mizuho Securities USA considers Spade “of high attractiveness for many brands, considering its growth and the impact it has on millennials in all categories, including clothing and jewellery. Coach is evaluating its performance.” The Wall Street Journal cites other companies that are interested in the acquisition. Among all, there’s Michael Kors Holdings and the G-III Apparel Group (which recently bought Donna Karan and DKNY). In the last fiscal quarter (October 1 to numbers) Kate Spade had exceeded Wall Street expectations with profits close to $ 30 million and sales at + 14.1% (+ 13.7% in the US, 18.9 to outside the domestic market). Swords operates 175 stores in the US and 93 in the rest of the world. Caerus motivated its needs of selling because “the brand face fatigue compared to competitors: it is urgent a strategic plan for the development of the accessories line”.
Kate Spade is up for sale. Among the possible buyers Kors and Coach
