Talk of Coach Sale Sparks Stock Rally
Upscale retailer Coach shares rose sharply in early trade Wednesday after an unconfirmed report from DealReporter.com said the company may be exploring a sale of itself.
The report comes on the same day as the company said it has hired a former Nike executive to oversee the transformation of its stores as it moves further into segments where the leather goods maker is a relatively small player, such as shoes and clothing.
Coach announced its new strategy to open "shoe salons" and provide a fancier presentation of its wares in the wake of last month's report of weak holiday sales. Longtime Chief Executive Lew Frankfort also plans to step down in January 2014 and be replaced by the executive who oversaw the upscale leather-goods maker's successful expansion in Asia.
During CNBC's "Squawk on the Street," Jim Cramer, a CNBC contributor, said he thought the rumors were "so unfounded" and "short of facts."
Zach Augustine, previously a global creative director at Nike, will report to Coach President Reed Krakoff in this newly created role and begin March 11. He will be in charge of the visual presentation inside Coach stores and their architecture.
Although Coach stock was up about 4 percent in early trade, its shares have fallen about 40 percent from a high of nearly $80 a share that the company hit in late March due in part to concerns about its North American sales.