Kate Spade and the Uncertain Future

If there is a market, that is experiencing a fall in sales and a brutal increase in competition that is the complement in the United States. In recent years companies such as Michael Kors, Coach – with revival included – Longchamp, Tory Burch, Fossil, Guess… have improved their sales strategies especially in the online market, have lowered their prices and compete as never before to increase sales with lower margins.

Within this sector of «affordable» handbags is Kate Spade, an American company that has had its golden years on the market during the worst of the crisis thanks to its policy of low prices and bold designs and that could now be on sale. Sales of handbags – the star supplement by nature in the United States has fallen brutally during the years of the crisis. The compilers look for the discounts and the online outlets when choosing a bag, and the millennials take into account not only the novelty but the social commitment of the companies.

All that «made in China» starts to be a problem. The question is whether companies have the financial muscle needed to re-manufacture in the United States and sell their products at competitive prices. This change, for example, has cost Coach to lose money, to fall in profits, and to reduce its margin of business during ten years. Coach was the first American firm to realize that it could not sell handbags made in China at prices above $ 500 – as if they were luxury – and for a decade has been moving part of its manufacturing to the United States, at Time that updated the prices of its products and signed to Vevers like Creative Director.

At the moment Coach has not only recovered in stock and sales but has submitted offers to buy Burberry in an attempt to modify its perimeter and return to the real luxury, which is manufactured in the West with wages of the West.