Kate Spade’s Digital Capabilities Make it an Attractive Acquisition
If the Kate Spade & Co. strategic review announced on Thursday yields a sale, the buyer would be getting a company that has a well-integrated digital platform, experts say.
In its fourth-quarter earnings release, Kate Spade KATE, +1.06% said it has hired advisors Perella Weinberg Partners to explore strategic alternatives. There’s no timeline, according to the release, and there’s no guarantee that the evaluation will lead to any one result, including a sale.
Kate Spade shares closed up 14.7% following the news.
“The brand has done a good job of positioning itself as a unified brand across channels,” said Chris Paradysz, chief executive of PMX Agency, a global marketing firm. “It’s a seamless experience for the consumer, which makes it easy to shop there and understand the brand.”
With online channels—including e-commerce and mobile—growing in sales significance for retailers, an acquisition with a first-rate digital platform would be a solid purchase, analysts said. Moreover, companies looking for additional expertise could be enticed to buy what Kate Spade offers rather than attempt to build it.
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