Coach has announced that it has officially acquired rival handbag maker Kate Spade in a $2.4bn deal.
The deal comes after months of speculation that the two New York-based fashion brands would tie the knot.
“Kate Spade has a truly unique and differentiated brand positioning with a broad lifestyle assortment and strong awareness among consumers, especially millennials,” said Victor Luis, chief executive of Coach, in a statement. “Through this acquisition, we will create the first New York-based house of modern luxury lifestyle brands, defined by authentic, distinctive products and fashion innovation.”
The acquisition comes as 76-year-old Coach looks to appeal to a younger audience. Luis told Bloomberg that millennials make up about 60 percent of Kate Spade’s customer base. In a bid to appeal to a younger crowd, Coach recently tapped singer Selena Gomez and actress Chloe Grace Moretz to serve as brand ambassadors.
The deal is also part of Coach’s ongoing turnaround strategy, which began in 2013 in the face of stiff competition, deceased foot traffic to department stores and heavy product discounting. Since then, Coach has brought on British designer Stuart Vevers as executive creative director and in 2015 acquired luxury shoemaker Stuart Weitzman for $574m.