New York—Shares of Coach Inc rose the most in four months Thursday after after a report surfaced that LVMH apparently is interested in buying the American leathergoods company.
Supposedly LVMH was interested due to Coach’s turnaround strategy that includes moving from high-end leathergoods to ready-to-wear, primeretailer.com said, citing sources.
Coach said it did not comment on rumors and speculation. LVMH declined to comment.
Coach, founded in 1941 in a Manhattan loft, has reported declining sales for five quarters in a row, losing market share to newer entrants such as Michael Kors Holding Ltd and Kate Spade & Co.
However, Coach’s recent fashion shows and products purportedly appealed to LVMH’s design team.
“Even though LVMH has expressed its interest to acquire more brands, it’s unclear whether with Coach there’s a potential acquisition looming or it’s more of a competitive interest,” the website said.”Given the profiling of LVMH and recent developments with Coach, former is suspected.”
But some financial analysts aren’t convinced that such a hook up is possible.
“It is more likely that Coach is seen as going up-market than in its past,” David Schick, Stifel analyst, said in the note “There has been media discussion of LVMH interest in Burberry in the past. At the very least this could be a valid suggestion that Coach’s new direction is turning heads.”