NEW YORK: Handbag and accessory maker Coach reached a deal to acquire rival Kate Spade for $2.4 billion, the companies announced Monday.

The agreement will boost the marketing opportunities for both luxury New York-based designers of handbags, shoes and various accessories, the companies said, at a time when sales are declining at department stores where they have sold their goods.

By combining, they expect to save about $50 million a year in inventory management and other operational efficiencies, the companies said a joint press release announcing the deal.

Coach chief executive Victor Luis said the acquisition would boost the firm’s prospects with millennials. In December, Coach, which dates to 1941, announced a marketing partnership with actress and singer Selena Gomez, in an effort to woo this key demographic group.—AFP