|Coach announced Monday that it had reached an agreement to buy handbag maker Kate Spade for $2.4 billion as the industry struggles with discounts needed to contend with toughening competition. Coach’s offer of $18.50 per share for Kate Spade represented a 9 percent premium on the stock’s Friday closing price. The acquisition, rumored for months, will allow Coach to broaden its customer base, offering its own leather handbags with embossed logos as well as Kate Spade’s colorful, kitschy accessories, including handbags in the $100 to $500 range. The move comes as Coach backs away from flooding major department stores with its wares, which analysts said devalued the brand.
Source: The New York Times