GOLDMAN SEES COACH RULING THE HANDBAG MARKET AFTER KATE SPADE PURCHASE

In The Daily Scoop by Lauren Parker, Accessories Magazine

Investors should buy Coach shares because its acquisition of rival handbag maker Kate Spade will drive earnings higher from merger cost savings, according to Goldman Sachs, which raised its rating on the luxury goods firm to buy from neutral. The company announced a definitive agreement to acquire Kate Spade for $2.4 billion in cash or $18.50 per share Monday.
“We upgrade COH … on the back of increased confidence in its strategic allocation of capital,” Goldman’s Lindsay Drucker Mann wrote in a note to clients Tuesday. “If successful, the proposed KATE merger agreement … could be a transformational moment for the business, with the potential to create substantial earnings accretion through cost synergies and favorable financing costs.” Read more at CNBC

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