Coach Inc, the maker of luxury handbags and heels are now giving bargains for its luxury brand. This comes after Coach shares tumbled 17% compared to rival Michael Kors Holdings Ltd after it went public 2011. Despite Coach having the largest profit earnings amongst its luxury brand rivals, the company is only trading 13.6% of its earnings or only 4% of its closest competitors according to statistics obtained by Bloomberg.
Coach is currently valued at US$14 billion and its ability to generate cash could attract private equity firms such as Atlantic Equities LLP or other luxury brands such as LVMH Moet Hennessy Louis Vuitton SA and PPR SA.
When asked for comment Coach spokeswoman Andrea Resnick declined to comment on the future takeover of the brand by other firms.
Should a private equity firm purchase Coach, it would spur international expansion for the brand because of increasing competitive pressure from other luxury handbag makers such as Michael Kors. The estimated price per share to make the bid interesting for management should be between US$65 and US%70.
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