Coach to Buy Kate Spade

Coach (New York) is buying Kate Spade (New York) in a deal valued at $2.4 billion, or $18.50 per share.

According to a press release, Coach will maintain Kate Spade’s brand independence and core talent.

“Due to the complementary nature of our respective businesses, we believe that we can realize a run rate of approximately $50 million in synergies within three years of the deal closing,” said Kevin Wills, Coach’s cfo. “These cost synergies will be realized through operational efficiencies, improved scale and inventory management, and the optimization of Kate Spade’s supply chain network. At the same time, to ensure the long-term viability and health of the Kate Spade brand, and similar to the steps Coach has itself taken over the last three years, we plan to reduce sales in Kate Spade’s wholesale disposition and online flash sales channels.”