Kate Spade & Co. sought a sale deal

According to foreign media reports on the 29th, people familiar with the matter revealed that high-end handbag and clothing manufacturer Kate Spade & Co. (KATE) is seeking a sale deal under pressure from activist shareholders.

One of the people said the New York company was working with an investment bank and had contacted potential buyers, including from other retailers. The company’s sale process is still in its early stages.

As of Wednesday morning, Kate Spade’s market capitalization was about $1.9 billion. The company’s value has declined due to the difficult retail environment.

In November, activist hedge fund Caerus Investors disclosed its small stake in Kate Spade and called on the company to consider selling itself. The fund noted that since the summer of 2014, Kate Spade shares have fallen sharply and the market has lost confidence in the company’s management.

A Kate Spade representative declined to comment Wednesday.

Kate Spade is likely to attract many potential buyers. Coach Inc. (COH) has long been seen as a suitable buyer for Kade Spade, as Coach also focuses on handbags and accessories and has stores in department stores. Coach may also help Kate Spade expand overseas. However, Kate Spade may also attract luxury accessory makers, overseas buyers and private equity firms, in part because of its manageable size.

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