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Inside Retail (May 8th, 2017)

Coach Inc. (COH) is acquiring Kate Spade & Co. (KATE) in a $2.4 billion deal that many analysts saw coming. For Coach, the acquisition of its rival high-end accessories retailers is just the latest in a string of acquisitions to build the company into a luxury conglomerate similar to Hennessy Louis Vuitton or Kering. Some analysts suspect Burberry could be Coach’s next buy. “While M&A is not often seen positively by equity markets in luxury, we believe that for Coach it is different,” HSBC analysts wrote in a recent note to clients. Kate Spade shares surged 8 percent on the news as Coach shares rose about 5 percent. – NYT

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On the brink of bankruptcy, Gymboree Corp. plans to close as many as 350 stores as part of its restructuring process, according to the Wall Street Journal’s unnamed sources. Meanwhile, the children’s clothing retailer is hustling to contact companies that liquidate inventories. Gymboree is facing interest payments on its debt due June 1 and, according to Bloomberg, is “seeking to reorganize its debt load and may transfer control to its leaders.” Gymboree, which is controlled by Bain Capital, has not commented on the report. – RETAIL DIVE

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American Apparel will try to appease consumers who prioritize buying apparel made in the U.S. while also keeping prices competitive by offering two options. The clothing retailer may allow consumers to choose between products made in the USA or made overseas, but the former would be priced 25 percent higher. Last year, American Apparel was acquired by Gildan Activewear Inc., which is now trying to keep its main selling point and namesake – clothing manufactured domestically. “There are consumers that really want ‘made in USA,’ so we’re going to cater to those consumers,” said Gildan Activewear CEO Glen Chamandy.  – BLOOMBERG  

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Express Inc., a mall-based women’s apparel retailer, says it will close its operations in Canada, including all 17 stores. The company will still operate its 635 U.S. stores. “The challenging Canadian retail environment, coupled with favorable exchange rates prevented us from meeting the expectations we had when we entered the market in 2011,” said CEO David Kornberg. Express said it is now investing its resources into endeavors that can generate greater returns, including in e-commerce, its loyalty program and omni-channel capabilities. Express Canada had about $34 million in sales in its fiscal year ended Jan. 28, 2017. – RETAIL DIVE

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Camping World Holdings Inc. (CWH) said that it will keep about 70 Gander Mountain Stores open following its planned acquisition. Camping World’s acquisition of Gander Mountain and its Overton’s Inc. business was approved May 4. Camping World CEO Marcus Lemonis took to Twitter to correct reports that all Gander Mountain stores are closing. “I will go as long as the path to profitability is clear,” Lemonis wrote in a Tweet, followed by lists of stores that would remain open. All 126 Gander Mountain stores are liquidating, but he said they are “aren’t closing.” – BUSINESS WIRE

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