Published on April 4th, 2017 | by Sofia Vida0
Is This The End For Kate Spade?
Rumors have been floating around for awhile that Kate Spade was interested in putting itself up for sale. The company has been considering a buyout from rival Coach and things may not be going well it seems.
On Tuesday the stock crashed in early trading after the company asked for more time to consider the offer Coach gave.
This had investors in a panic that perhaps the offer was less than expected.
Shares fell more than 14% after the news.
The handbag and accessory company also has Michael Kors interested. According to three anonymous sources who spoke to CNBC, the deal is likely to value the company at below its current trading price.
“If they had gotten the bid they wanted, they wouldn’t be asking for more time,” Simeon Siegel, retail analyst at Nomura Instinet, explained to CNBC.
It was in February when the luxury retailer announced that it was exploring strategic alternatives for its business. The announcement was made along with the release of fourth quarter earnings which beat Wall Street’s expectations.
Kate Spade management said at the time that it is”conducting a process to explore and evaluate strategic alternatives to further enhance shareholder value.”
“Our solid fourth quarter and fiscal year performance demonstrate the strength of our differentiated business model, as we continued to gain market share and deliver strong growth despite a challenging retail environment,” CEO Craig Leavitt said.
Disclaimer: We have no position in Kate Spade & Co (NYSE: KATE) and have not been compensated for this article.