Kate Spade and Co, (NYSE: KATE) is a very well-known fashion company that designs all gender’s apparel and accessories. The company is also the main jewelry supplier for Liz Claiborne Inc and Monet Jewelry Lines. In addition, they have two segments in North America which are Kate Spade New York and Jack Spade.
Less than a week ago, the company faced their first quarterly sales decline in years which could weaken their bargaining power since they have put themselves for sale in February of this year. According to Bloomberg, this Tuesday, ‘’Kate Spade reported a 2.4 percent decline in same store sales which ensued a significant price reduction of handbags.
They closed at a price of $US. 17.78 Thursday and opened at $US. 18.08 Friday morning. They had a significant drop at around 10:00 am and as of 12:00 pm eastern time, their current price is $US. 17.44. This layout shows that Kate is at a level where its price is constantly dropping. The company;s stock went from a high of $US. 23.58 price to a $US. 17.41 in a month. This is a 26% drop. (http://www.katespadeandcompany.com/web/guest/quote)
What does that mean? The difference is roughly ($5.43) decrease in the interval of a month. A low share price is not necessarily alarming unless it’s happening with a company with stable stock historical price like Kate Spade and Co. There is now a decrease in demand of Kate Spade stocks in the market because not only the company is making less profit than before, they are having meaningful financial losses.