Kate Spade & Co. is exploring a sale. The New York-based handbag and accessories brand is working with a bank to gauge interest among possible buyers, according to the Wall Street Journal, which cited people familiar with the matter. The potential buyers include a number of retailers, the newspaper reported, adding that the process was at an early stage.
Sales of handbags have weakened over the past year in the U.S., as consumers are abandoning department stores in favor of online shopping. Lower spending by tourists, due to a strong dollar, has also hurt sales. In response, affordable luxury handbag makers, such as Coach and Michael Kors, are inching out of department stores and exploring deals with other brands. Coach, for instance, which acquired footwear brand Stuart Weitzman in January 2015, recently made multiple takeover offers for British luxury brand Burberry but was rejected, the Financial Times reported this month.
Kate Spade, known for its quirky and colorful satchels and totes, reported lower-than-expected quarterly same-store sales last month and said pricing competition would likely dampen earnings during the holiday shopping quarter. Spade, herself, who founded the company in January 1993, left in 2007 when the brand was acquired by Liz Claiborne in 2007 for $125 million. She has since launched a new footwear and handbag company, entitled, Frances Valentine.