Coach has been the classic and luxury handbag company since 1941, and on Monday, they acquired their New York rival, Kate Spade.
They really did it, they really made another iconic move… and i can nearly feel Michael Kors squirming.
Coach bought out Kate Spade for $2.4 billion which came as a surprise to me. I would have figured Kate Spade was worth much more. It seems like I am seeing everyone and their mothers pulling out a Kate Spade wallet from their Kate Spade purse.
So what does this mean? Well, Coach has died out for most millennials; whereas, Kate Spade has become the newest “must have”… maybe because of the lower prices or maybe because of the trendier designs.
These two very contrasting brands just came together to create a multi-brand fashion house. Coach has always help a very classic brand. Having a coach bag on your shoulder meant you were an “it girl” back in the 70’s and 80’s. Now, still very classic, but seen as borderline boring.
On the contrary, Kate Spade a very young rival, has their own flavour that has attracted the eye of millennials. From funky shaped bags and patterns to statement pieces, Kate Spade is very known on the streets.
Coach is making an aggressive push to polish their brand. After awhile, everyone needs a facelift. Kate Sade is simply giving Coach extra years to their face. In addition, Coach hired Joshua Schulman, who had been president of Neiman Marcus’s Bergdorf Goodman division and the former CEO of Jimmy Choo, further increasing their multi brand fashion house
The handbag industry is a very crowded market but I believe Coach just did exactly what they needed to truly compete; and people are noticing. Coach’s stock it up 8% this morning from last night’s close.
A happy compromise would be ideal for this millennial.
So maybe this is the best of both worlds. I could get a Kate Spade purse design, with a Coach logo… and hopefully a Kate Spade price…
One can only hope.