The constant discounting had diluted the brand’s luxury appeal,<br />and the company, under the direction of Mr. Luis, looked for ways to cut back on the discounts — including closing a significant number of its locations within department stores, known as “shop-in-shops.”<br />“If you want to be a premium brand, you can’t really be too strongly associated<br />with some of the mainstream department stores like Macy’s,” Mr. Saunders said.<br />Coach’s $2.4 Billion Kate Spade Deal Aims at Weak Middle of Fashion Market -<br />By ELIZABETH PATON, VANESSA FRIEDMAN and RACHEL ABRAMSMAY 8, 2017<br />Coach and Kate Spade have long been the affordable luxury brands of choice for the aspirational shopper.<br />While outlet stores have become more popular in recent years — Coach operates several hundred — department stores cannot attract the crowds they once did,<br />and traffic to malls has slowed as people hunt for bargains online.<br />This month, the company, which pioneered the sale of luxury handbags at relatively affordable prices, announced<br />that department store revenue had fallen 40 percent in the most recent quarter, a sign of how heavy discounts, falling foot traffic and other troubles have seeped into the brand.<br />But in recent years, those customers have gravitated to brands at more extreme ends of the style spectrum, toggling<br />between e-commerce giants like Amazon, fast-fashion brands like H&M and Zara, and luxury houses like Gucci.<br />Its acquisition of Kate Spade, announced on Monday, confirms months of speculation on Wall Street,<br />and is the latest in a series of purchases by the company, which aims to build a luxury group in the vein of European groups like LVMH Moët Hennessy Louis Vuitton and Kering, with two major differences: an identifiably American aesthetic and price.
