Coach Acquires Kate Spade For $18.50 Per Share

As the WSJ adds, both companies, based in New York, have battled a retail environment that has been challenging, especially for designers with significant exposure to department stores, where traffic has declined. U.S.-based luxury brands are also negatively affected by a strong U.S. dollar.

It notes that sales at Coach have started to grow again as it pulled back from department stores and dialed back promotions. The company said it plans to do the same for Kate Spade after the deal closes, which is expected to occur in the third quarter.

Kate Spade shares rose 8.5% to $18.41 in recent premarket trading; they had risen as high as $24 in recent months on hopes of a substantial M&A premium. 

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