Kate Spade reports growth and considers sale
Kate Space has reported a near 10% growth in fourth quarter 2016 net sales and has said it is reviewing its strategic options, which may or may not lead to a sale of the US accessories, fashion and lifestyle brand.
Fellow US brands Coach (which last year made informal approaches to buy British luxury house Burberry) and Michael Kors have previously been linked with interest in buying Kate Spade, while industry watchers say luxury conglomerates such as LVMH, Kering and Richemont are also potential purchasers.
The business has appointed advisers Perella Weinberg Partners to "review strategic alternatives to enhance shareholder value", which typically means it is assessing the option to sell. It has said it intends to pursue the review in a timely manner but said there is "no assurance that this review process will result in a transaction or other strategic alternative of any kind."
Kate Spade CEO Craig A Leavitt said the business had had a "solid" fourth quarter of 2016. Net sales for the quarter were $471m, an increase of $42m, or 9.8%, compared to the fourth quarter of 2015. Income from continuing operations was $87m compared to $62m in the fourth quarter of 2015.
"Our solid fourth quarter and fiscal year performance demonstrate the strength of our differentiated business model, as we continued to gain market share and deliver strong growth despite a challenging retail environment. In 2016, we further strengthened our handbag portfolio, introduced new categories to our casual ready-to-wear classifications, and thoughtfully expanded our global store base, opening 52 net new owned and partner-operated stores," Leavitt said.
