Coach And Kate Spade May Be Merging - Declining Sales All Around

melissatrv

melissatrv

O.G.
Feb 8, 2009
11,479
2,966
#1
I have read several articles lately about this, here is one recent article. Apparently KS is in deep trouble and is in merger talks with Coach. If this does not go through they will be auctioned off to the highest bidder

http://www.retaildive.com/news/coach-michael-kors-reportedly-eye-kate-spade-ahead-of-auction/434539/

What are your thoughts on a Coach - Kate Spade merger? What do you think is attributing to declining sales? What do think could help fix it? My thoughts below:

But several articles I read noted declining sales for Coach, Kate Spade and Michael Kors. For all brands there was noted lack of interest in handbags in general for millennials. For Coach and KS price increases and fewer discounts were mentioned. Though MK did do a lot of discounted, there has been a lack of variety to choose from compared to past seasons.

I am a buyer of all 3 brands and here are my thoughts

Kate Spade has a lot of cute fun bags that would appeal to the younger set. But the price point is too high. My daughter is that age and her friends and fellow students usually carry backpack styles or a small cross body and don't often change bags. KS has significantly reduced their sales. And when they do have sales it is usually 20% off, there are much fewer of the "Take an additional 25% off sale prices" coupons.

Coach done a lot of things over the past couple of years. Most notably changed designers to Stuart Vevers and like Kate Spade have much fewer sales or PCEs. I have noticed Coach has been excluded this year from Macy's, Belk, Lord and Taylor limited exclusion sales. Coach has all but disappeared from Belk, they had a dedicated mini store for years which is now Brahmin. Outlets no longer have the discounted full price bags that they did. They have their own Factory bags which are named after and even duplicated styles of the full price bags. I think that is hurting them more than sending reasonable amounts of full price bags to outlet. If they wanted to appeal to Millennials they should have kept the Poppy line or done some similar. My daughter and her friends think the SV Coach bags look like "old lady" bags and the new darker design of the stores is not appealing

MK - yeah they have great sales all the time. But I sooooo bored of the bag selection. They discontinued Hamilton and Sutton, both popular styles and keep recycling the same colors season after season. I'd really like to see something new from them. Then just added this horrible 3-in-1 style which totally cheapens the whole brand . You can swap out "jackets" that make the bag change colors <shiver>. Yeah I see that increasing sales
http://www.michaelkors.com/selma-sw...er-satchel/_/R-US_30S7SP2S2L?No=11&color=0001

Personally I think the execs at these companies need to go back to the table and look back at what was working a few years ago when they were Wall Street darlings and do what was working well
 
#2
I love the look of Kate Spade, but the quality is poor. Coach is much better.

I don't see why Coach would buy Kate Spade. Coach needs to diversify their product offering and stop fighting over a small handbag sales market. And they are trying. So good for them.
 
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#4
I agree 100% that MK just lacks new, GOOD styles. The "collection" line has some good things, but IMO, not as luxe (i.e thick leathers) as Coach.
Can't comment on KS other than nothing there even catches my eye.
I hope Coach just stays the course...although the overly embellished bags are not my cup of tea.
 
#5
I haven't bought Coach in a few years and the only Kate Spade I have is three iPhone cases. I'm addicted to the iPhone cases. I don't think this would be a good merger for either, especially Coach though.
 
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#6
I was an avid KS fan for years up to about 2 years ago. I think their quality has gone down, and the styles don't really appeal to me anymore.

I've sold off all of mine with the exception of 2 collector items, and 2 clutches.

The only Coach I buy now are vintage pieces I've had my eye on for awhile but even those are on the back burner while I finish my luxury list (Gucci, Balenciaga, etc.)
 
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#7
I always thought Kate Spade bags were adorable, but their leathers look so cheap. And I always found their clutches to be severely overpriced for their quality, too. I've since stopped buying their bags. If Coach buys KS, I hope they can improve the latter's products and improve the quality so maybe the sales will improve.
 
#9
HesitantShopper said:
The last thing Coach needs to do is add more to it's plate, it's in enough trouble on it's own without adding a brand headed for the rocks. KS has some cute stuff but i find it's rather pricey on the overall for what your getting.
Click to expand...

This is exactly what I was going to say. KS is way too overpriced for what you get. I feel the same way about MK. I used to be an avid MK fan a few years ago, but the lack of new styles and all the saffiano leather got a bit old. Not to mention quality control was getting atrocious. I found myself buying bags only for the colors. MK always came out with amazing colors, but sadly they haven't even had that going for them these past few seasons. I'm loving Coach right now, especially the 1941 stuff. Coach has enough going on with bringing itself back; they don't need to be picking up another failing brand.
 
#10
HesitantShopper said:
The last thing Coach needs to do is add more to it's plate, it's in enough trouble on it's own without adding a brand headed for the rocks. KS has some cute stuff but i find it's rather pricey on the overall for what your getting.
Click to expand...

I gotta agree with this. I've had so many quality issues with Coach in the last year (cracked rivets on a Rogue, chipping hardware on my 1941 key fob, etc, etc). They really just need to focus on putting out a more consistent product instead of gobbling up additional brands.
 
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#11
I can't imagine a merger. I can imagine Coach buying it and keeping it separate, but why would they want to buy a sinking ship? They are crawling out of the hole themselves; they don't need something that is going to drag them back down.

I agree the quality of Kate Spade is terrible. Some of the accessories are adorable. However, the owl coin purse I bought last year and only used for a few months is already falling apart. The prices are too high for the quality. I have never found a Kate Spade bag that was comfortable to carry. I think Kate Spade also has trouble differentiating their retail from their outlet. A few years ago, I liked a bracelet at FP Kate Spade, then found the outlet version on the same day. They were virtually identical but the outlet version was half the price.
 
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#12
ugh I hope not, I don't really like MK or KS and Coach has it's own issues with quality control. My pink saffiano key case has peeled horribly which is shocking as I have a bag from the 80s which is still basically perfect...
 
#13
melissatrv said:
I have read several articles lately about this, here is one recent article. Apparently KS is in deep trouble and is in merger talks with Coach. If this does not go through they will be auctioned off to the highest bidder

http://www.retaildive.com/news/coach-michael-kors-reportedly-eye-kate-spade-ahead-of-auction/434539/

What are your thoughts on a Coach - Kate Spade merger? What do you think is attributing to declining sales? What do think could help fix it? My thoughts below:

But several articles I read noted declining sales for Coach, Kate Spade and Michael Kors. For all brands there was noted lack of interest in handbags in general for millennials. For Coach and KS price increases and fewer discounts were mentioned. Though MK did do a lot of discounted, there has been a lack of variety to choose from compared to past seasons.

I am a buyer of all 3 brands and here are my thoughts

Kate Spade has a lot of cute fun bags that would appeal to the younger set. But the price point is too high. My daughter is that age and her friends and fellow students usually carry backpack styles or a small cross body and don't often change bags. KS has significantly reduced their sales. And when they do have sales it is usually 20% off, there are much fewer of the "Take an additional 25% off sale prices" coupons.

Coach done a lot of things over the past couple of years. Most notably changed designers to Stuart Vevers and like Kate Spade have much fewer sales or PCEs. I have noticed Coach has been excluded this year from Macy's, Belk, Lord and Taylor limited exclusion sales. Coach has all but disappeared from Belk, they had a dedicated mini store for years which is now Brahmin. Outlets no longer have the discounted full price bags that they did. They have their own Factory bags which are named after and even duplicated styles of the full price bags. I think that is hurting them more than sending reasonable amounts of full price bags to outlet. If they wanted to appeal to Millennials they should have kept the Poppy line or done some similar. My daughter and her friends think the SV Coach bags look like "old lady" bags and the new darker design of the stores is not appealing

MK - yeah they have great sales all the time. But I sooooo bored of the bag selection. They discontinued Hamilton and Sutton, both popular styles and keep recycling the same colors season after season. I'd really like to see something new from them. Then just added this horrible 3-in-1 style which totally cheapens the whole brand . You can swap out "jackets" that make the bag change colors <shiver>. Yeah I see that increasing sales
http://www.michaelkors.com/selma-sw...er-satchel/_/R-US_30S7SP2S2L?No=11&color=0001

Personally I think the execs at these companies need to go back to the table and look back at what was working a few years ago when they were Wall Street darlings and do what was working well
Click to expand...


I don't understand where your'e getting merger from? It would be a buy out, Coach or MK would own Kate spade as an entity, not a merger....

There a number of articles on the situation as well, apparently LVMH has expressed some interest in the brand which would be the best solution for the Kate Spade company as a whole, they would be able to offer them the most money as well as turn the company around.
 
#14
Honestly? Kate Spade is one of the relatively few brands I refuse to purchase, for personal reasons. If they merge, I will not give any profit or monetary supposed from myself, to Spade, so I guess I would no longer buy new Coach. It would be a bummer, but it would just be what I had to do. :sad: I think it's a line I won't cross.

I actually haven't bought much new Coach lately anyway. The embellishments are way too much for me. I did get a butterscotch Rogue, and love the look of it. It's just too much bag for me though. I've used it once. Daughter loves it, and I will hold onto it for when she would need bigger bags for college. (Four years away now, so not stretching things too far.)
 
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#15
whateve said:
I can't imagine a merger. I can imagine Coach buying it and keeping it separate, but why would they want to buy a sinking ship? They are crawling out of the hole themselves; they don't need something that is going to drag them back down.

I agree the quality of Kate Spade is terrible. Some of the accessories are adorable. However, the owl coin purse I bought last year and only used for a few months is already falling apart. The prices are too high for the quality. I have never found a Kate Spade bag that was comfortable to carry. I think Kate Spade also has trouble differentiating their retail from their outlet. A few years ago, I liked a bracelet at FP Kate Spade, then found the outlet version on the same day. They were virtually identical but the outlet version was half the price.
Click to expand...

This actually sounds like Coach as well....:smile:
 
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