Coach spending $2.4B to acquire Kate Spade

NEW YORK (AP) — Coach will spend $2.4 billion for Kate Spade, tying together two premier brands in the luxury goods sector that have fought to snare younger shoppers.

Noting that crucial demographic, Coach Inc. CEO Victor Luis said in a company release Monday that Kate Spade has a "strong awareness among consumers, especially millennials."

Coach will pay $18.50 per share of Kate Spade & Company. That's a 9 percent premium to its Friday closing price of $16.97.

Coach has made an aggressive push to polish its image as a purveyor of opulence, ending many of the promotions it had used to ramp up sales. But to power future growth, it's begun to build an empire of luxury brands.

In 2015, Coach acquired the high-end footwear company Stuart Weitzman.

Last month the company hired Joshua Schulman, the president of Neiman Marcus's Bergdorf Goodman division, and put him in the newly created position as president and CEO of the Coach brand. Many took that as a step toward a new company structure with a number of distinct brands under one umbrella, with each brand chief reporting to Luis.

Schulman officially begins his job on June 5.

Shares of Coach appeared headed toward a new high for the year before the opening bell, and Kate Spade's stock surged more than 8 percent.