Coach acquires Kate Spade to chase millennial luxury spenders
After months of speculation, it’s now official: Coach is buying Kate Spade. And Jimmy Choo may be next
But don’t expect to find Kate Spade wallets in Coach stores. In fact, Coach intends for its brands to remain so independent, it doesn’t want its shoppers to know Kate Spade and Stuart Weitzman are under its umbrella too.
“We don’t want consumers to any have idea that there is a link. We don’t think it’s relevant,” explained Coach CEO Victor Luis in an interview with CNBC. “It’s the current scenario with Stuart Weitzman [and Coach]. To that end, there won’t be links between the brands online. All the connection will be on the back end of the business” like logistics and some supply chain costs.
This is a reflection of how Coach classifies itself now, as “a leading New York design house of modern luxury accessories and lifestyle brands.”
The brands will remain very separate because they are complementary in Luis’ mind as he describes each.
Kate Spade has “a unique brand attitude that’s youthful, with a much higher penetration of millennials, fashionable, fun, feminine with a bit of whimsy,” Luis said.
He described Coach as “America’s house of leather. There’s a legacy, a quality of product and fashion attitude brought by creative director Stuart Vevers.”
There are no immediate plans to close Kate Spade’s full-priced or outlet stores. Coach claims a 35 per cent store overlap between the two brands, which it classifies as low.
But, shoppers should expect to see less Kate Spade product on flash sale sites like Gilt, and in department stores that Coach says have become too promotional. Like at Coach, Luis is working to rebuild premium distribution and pricing.