Kate Spade'S Latest Financial Data Will Weaken Its Selling Price.

According to the world clothing shoes and hats net, the American light luxury brand.

Co. & amp; C announced the first quarter financial data for the new fiscal year, and the same store sales for the first time in eight years.

This is just the same for Kate Spade, which is seeking to sell.

Last December, under the pressure of radical investors, Kate Spade worked with investment banks for sale.

In January this year, relevant sources said that six companies including competitors Coach and Michael Kors were interested in acquiring Kate Spade, of which Michael Kors and Coach entered the second round of auction in February.

The latest financial data released by Kate Spade this week may weaken its bargaining power at the time of final sale.

Wolfe Research analyst Adrienne Yih Yih said: the latest data of Kate Spade will make potential buyers make a big fuss about valuations, which may make Coach a more cost-effective paction.

Like most retailers, Kate Spade is facing difficulties such as declining market traffic, increasing online competitors and reducing tourism consumption. Besides, Kate Spade also needs to deal with pressure from radical investors and New York hedge fund Caerus Investors.

As of the first quarter of April 1, 2017, Kate Spade same store sales fell 2.4% year-on-year, far below analysts' expected year-on-year growth of 4.5%.

According to compiled data, this is also the first time that Kate Spade has suffered the first decline in same store sales since the third quarter of 2009.

Jefferies Group LLC analyst Randy Konik said in a Memorandum: "the latest quarterly data may make the tenderer suspend the bid, and if the paction is finally concluded, it will be a more rational price multiplier."

As department stores cleaned up their inventories and greatly reduced the price of handbags, Kate Spade faded out of the sales network of department stores and focused on direct selling of its 423 stores.

Kate Spade and Coach all say that the promotional activities of department stores dilute the value of the brand.

In order to boost sales and attract consumers to buy goods at full price, Kate Spade has launched new handbags, enriching household, clothing and household products, and initiates customized services.

From Liz Claiborne to Kate Spade

Kate Spade was founded by magazine editor Katy Brosnahan and her husband Andy Spade in the year of 1992. In the early stage of brand development, it established the location of "light luxury handbag" and accumulated small batch loyal customers early.

The company accelerated its development and sold tens of millions of dollars in 1998.

In 1999, Neiman Marcus Group, a luxury department store in the US, acquired most of the equity interest in the brand, then bought the remaining shares and auctioned it, and 2006 Kate Spade was the United States' old brand.

The company's Liz Claiborne Co. Ltd. bought us $124 million.

In 2006, there were nearly 40 Liz Claiborne.

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After CEO William L. McComb took office, he drastically cut down the Ellen Tracy, Dana Buchman, Sigrid Olsen and other weak brands. In 2011, he sold the brand name Liz to the chain store department, and renamed the company.

In 2013, the famous brands Juicy Couture and Lucky Brand, respectively, were sold to Authentic Brands Group LLC and Leonard Green Partners Partners, focusing on the luxury luxury brand of the full strength (see: left alone seedlings, and the group made a success in the past 7 years, cutting nearly 40 brands).

The company has also been renamed Kate Spade & Co., and has since been regarded as a strong bid target.

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In recent years, Kate Spade has been expanding product categories, from accessories, clothing to home, trying to pform into lifestyle brand completely, aiming to grow to a super brand with annual sales of US $4 billion.

But Caerus Investors, the shareholder of Kate Spade, is not so optimistic.

Last November, Caerus Investors said in an open letter that shareholders were very disappointed with the performance of Kate Spade. The best strategy to ensure the interests of shareholders is to sell.

Kate Spade said in February this year that the board was evaluating the strategic options. (see: Kate Spade.

On Tuesday, Kate Spade claimed that it is still unclear how long the negotiations will last and that there will be no guarantee that a deal will be reached.

Purchasing price forecasting

The share price of Kate Spade rose 60% in the three months after the news came out.

But since then there have been reports that the takeover may be postponed, the paction price is lower or lower, and the stock price of Kate Spade has fallen by 22% since April 3rd.

Bloomberg reported in March that Michael Kors had withdrawn from the bid. Following the Reuters news report, Kate Spade will have several weeks to negotiate the potential paction after receiving an offer from Coach.

If the deal is negotiated, the price may be lower than that of Kate Spade, when the market value was $2 billion 900 million (stock price 23 US dollars).

By the end of this Thursday, Kate Spade's share price has fallen by 4.2%, with a market value of $22.9 billion.

As of Friday's close, Kate Spade was priced at $17.54.

Kate Spade and Caerus Investors have not yet commented.

Cowen & Co. analyst Oliver Chen said Coach is unlikely to bid too high because Coach has always been prudent in managing return on investment.

He said the purchase price of Kate Spade could be between $22 and $25.

This price is lower than the psychological prediction price of Caerus Investors founder Ward Davis.

He said in February that the takeover price of Kate Spade should be between $20 and $30.

Monness Crespi Hardt & Co. analyst Jim Chartier said Coach would not care too much about the past achievements of Kate Spade, but they were more concerned about the synergy brought about by the paction and the potential to further expand the international market.

He said that the gross profit margin of Kate Spade increased by 1.4 percentage points in the first quarter, which is an encouraging sign.

"We all know how weak the retail environment is, but Kate Spade still has achieved more than expected.

The question is what kind of quotations the management can ultimately accept.

He said.

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