Luxury handbag retailer Coach is purchasing Kate Spade for $2.4 billion. The goal for Coach is to stretch the boundaries of their remarketing efforts and produce more multi-brand merchandise.

Two years ago, Coach acquired shoe brand Stuart Weitzman. The purchase brought portfolio diversification in areas of brand positioning, customer diversification, and products. Kate Spade’s revenue skyrocketed in 2016 to the tune of $1.3 billion. Shortly after, Kate Spade saw its profit margins fall below their competitors in the handbag market.

The Coach/Kate Spade deal will relocate product placements in some department stores, such as Macy’s. Coach feels that remaining in certain stores will cheapen the brand.


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