New York-based luxury brands Coach and Kate Spade have agreed to a merger. Coach Inc. has bought Kate Spade & Co. shares for $18.50 each, resulting in a deal worth 2.4 billion.
"Kate Spade has a truly unique and differentiated brand positioning with a broad lifestyle assortment and strong awareness among consumers, especially millennials," says Coach Inc. Chief Executive Officier Victor Luis in a statement published by Business Wire. "Through this acquisition, we will create the first New York-based house of modern luxury lifestyle brands, defined by authentic, distinctive products and fashion innovation."
The Coach CEO considers the merger as "an important step in Coach’s evolution as a customer-focused, multi-brand organization." He also believes that Kate Spade will benefit from Coach's quality supply chain and strong corporate infrastructure.
Business Insider reports that investors have been pressuring Kate Spade & Co. for a sale since November. While Forbes points out that the brand's namesake, Kate Spade herself, will not be benefiting from the sale.