US high end fashion company Kate Spade & Co explores sale
29 December 2016
US high-end fashion company Kate Spade & Co is exploring a sale after coming under pressure from an activist hedge fund, The Wall Street Journal reported, citing people familiar with the matter.
Kate Spade, which has a market cap of $1.9 billion, is working with an investment bank and has contacted possible buyers, including other retailers, the report said.
Last month, activist hedge fund Caerus Investors, which had started investing in the New York-based company since 2009, had called on it to explore the possibility of a sale on grounds that its stock had fallen since mid-2014.
''We believe the best path for enhancing shareholder value is to pursue a sale of the company,'' Caerus Investors had said then in a letter to Kate Spade
The company has recently been seen as a takeover target after it divested its Juicy Couture and Lucky brands in 2013 and 2014.
The sale was part of its plan to become a lifestyle brand selling everything from apparel to home goods, similar to Ralph Lauren Corp, with a goal of quadrupling revenue to $4 billion annually, Bloomberg reported.
Kate Spade, earlier known as Liz Claiborne, designs and markets a range of women's and men's apparel, accessories and fragrance products under the Kate Spade New York and Jack Spade labels.