The high-end handbag and apparel maker has contacted other retailers as possible buyers and is working with an investment bank, the Journal reported.
Caerus Investors, an activist investor that owns a stake in Kate Spade, urged it to find a buyer last month, writing that “shareholders (ourselves included) are incredibly frustrated” and “have lost confidence in management” after nearly two years of share price declines. Since 2014, the company has missed earnings and profit targets three times, Caerus wrote.
Until Wednesday’s surge, Kate Spade stock was down 21 percent for the year, closing at $14.02 on Tuesday. That’s a deep discount to its peers in designer retail, according to Caerus. The price surged to $17.70 on Wednesday after news of a possible sale.
High-end retailers have struggled in recent years from a decline in department store traffic and a drop in tourist spending, thanks to a strong dollar. Kate Spade, which has suffered from decreased tourist traffic this year, has also fought hard against discounts on its merchandise. Saks Fifth Avenue is no longer carrying the label after the two sides couldn’t agree on “promotions and other issues,” The Wall Street Journal reported last month.
Representatives for Kate Spade and Caerus did not immediately respond to requests for comment.