Kate Spade shares surge following potential sale

London - US fashion and accessories brand Kate Spade saw its share spike as much as 23.1 percent on Wednesday following news the company is currently exploring options for a sale.

The fashion brand is said to be under pressure to consider a sale from New York-based hedge fund and investor Caerus Investors, according to WWD. Caerus Investors is said to have sent a letter back in November to the company's chairman, Nancy Karch, pushing for the sale of the company.

In the letter, written by Ward Davis and Brian Agnew, the fund shares it concern for the future of Kate Spade, which has been struggling to stay ahead of its rivals. The lack of interest in the brand has led to a decline in its share price, which has dropped approximately 21 percent over the last 12 months. The fund believes a sale of Kate Spade is the best way to create more value for the company's shareholders, while securing the brand's future.

"We think Kate Spade would make a great acquisition candidate for a strategic company in the lifestyle accessories category," reads the letter, which stressed that the fund "strongly believe[s] that a strategic, industry player would be willing to pay a substantial premium to add this growth business to their portfolio." Caerus Investors first invested in Kate Spade in 2009, when the fashion brand was still held by Liz Claiborne. At the time the fund is also said to have pushed for the break up of the parent company, which finally took place in 2013.

No potential buyers have been named yet, but market speculation has already linked fellow US fashion company Coach as a possible buyers, as its CEO Victor Luis has already openly stated the company's interest in acquiring brands or business which can support its back office and sourcing chain. At the moment Kate Spade holds a market value of 2.3 billion dollars (1.8 billion pounds), with 175 stores across North America, in addition to 93 stores overseas.

Photo: Kate Spade, Facebook