Kate Spade, a fashion designer known for her playful and colorful namesake brand, was found dead in her New York City apartment Tuesday, in an apparent suicide.
Though Kate Spade sold a 56 percent stake in the brand to Neiman Marcus Group in 1999 and the remainder in 2006, investors are concerned that the brand bought by Coach, which is now Tapestry, for $2.4 billion last year, could suffer from the founder’s fate.
News of the apparent suicide sent Tapestry stocks down nearly 2 percent on Tuesday, closing at $44.76.
Schaeffers Research said in a note released Tuesday that Tapestry stock options are trading at seven times the average pace.
“Prior to today, bearish bets had been slightly more popular than usual on Tapestry,” Schaeffers Research said, adding that analysts are still devoted to the stock. “Although the shares are well off their late-April highs, 17 of the 24 brokerage firms maintain “strong buy” opinions. Plus, the average 12-month price target of $56.27 represents expected upside of roughly 25 percent to the luxury retail stock’s current perch.”
In its most recent financials released May 1, Tapestry said sales were driven by its Kate Spade acquisition, with net sales for the brand totaling $269 million. Global comp store sales, however, slid 9 percent, for which the company blamed “a decline in global e-commerce.”
“Kate Spade contributed to our overall performance, as we made continued progress on our integration efforts including the realization of synergies and the execution of strategic initiatives,” Tapestry Inc. CEO Victor Luis said in a statement accompanying the financials. “Most importantly, we were delighted to announce the appointment of Anna Bakst as CEO and Brand President, Kate Spade who officially joined us in late March. Together with Creative Director Nicola Glass, we now have the leadership team in place to drive the brand forward globally.”
Tapestry did not immediately respond to requests for comment about what any next moves might be for the business, but the company did issue a statement Tuesday, saying: “We at kate spade new york just learned of the incredibly sad news that Kate Spade has passed. Although Kate has not been affiliated with the brand for more than a decade, she and her husband and creative partner, Andy, were the founders of our beloved brand. Kate will be dearly missed. Our thoughts are with Andy and the entire Spade family at this time.”