After the early termination of the Gucci license last year and LVMH's decision to pick Marcolin as its new eyewear partner, Safilo faces the risk of losing the Kate Spade license, its largest eyewear brand in North America. On May 8, Coach, the American leathergoods company, said that it had agreed to buy Kate Spade for $2.4 billion. The deal is expected to close in the third quarter. Coach has had an eyewear agreement in place with Luxottica for its own house brand since January 2012, while Kate Spade's license deal with Safilo is up for renewal in December 2018.
Safilo declined to disclose the revenues generated by Kate Spade but stressed its “strong commitment” to the brand, which “achieved extremely good results” in the past years and was one of its top performers in the first quarter.
Coach is aiming for a run rate of about $50 million in synergies within three years thanks to operational efficiencies, improved scale and inventory management, and the optimization of Kate Spade's supply chain network. It also aims to leverage on its experience in operating specialty stores and expanding abroad to “unlock Kate Spade's largely untapped global growth potential.”
Safilo confirmed the brand's “high potential,” adding that it is ready to support its worldwide expansion.
Coach noted that Kate Spade has “a truly unique and differentiated brand positioning with a broad lifestyle assortment and strong awareness among consumers, especially millennials” and stressed its intent to preserve the brand's independence, retaining key talent.