Business

Tory Burch talking to Coach, Gucci parent PPR about selling stake in label

Tory Burch has Coach bags on the brain.

The flaxen-haired fashion designer recently held talks to sell a big stake in her label to Coach, the New York handbag behemoth run by accessories impresario Lew Frankfort, The Post has learned.

While discussions between the two labels recently broke off, they’re not necessarily dead, according to sources close to the negotiations. And whether or not she ties the knot with Coach, sources said Burch is still hoping to land a deal that values her company at upwards of $2 billion.

“It’s still very early, and [Tory Burch is] talking to a lot of different people,” according to a source close to the talks. “It’s still a learning process at this stage. There could end up being no deal at all.”

Officials at the fashion house declined to comment, and a Coach spokesman said the company doesn’t comment on “rumors or speculation.”

A tie-up between Coach and Tory Burch could create a powerhouse in lower-priced luxury — among the most lucrative and fastest-growing segments in retail.

Still, Tory Burch continues to hold talks with a bevy of potential suitors, including private-equity firms, overseas investment funds and high-net-worth individuals, according to a source.

The preppy label even had informal discussions recently with a director at PPR, the French luxury conglomerate run by Francois-Henri Pinault that owns Gucci, Yves Saint Laurent and Boucheron, according to a source.

The stake that’s for sale, equal to nearly 30 percent of the company, is owned by the designer’s ex-husband Christopher Burch, an eccentric retail entrepreneur who co-founded the label with his then-wife in 2004.

As first reported by The Post in December, Tory Burch hired Barclays Capital to find a buyer for the stake as tensions between the Burches escalated last year.

The key sticking point: Christopher Burch, to the chagrin of his ex-wife, has launched a retail venture, C. Wonder, which some critics say looks like a lower-priced version of Tory Burch.

Speculation about a potential lawsuit over C. Wonder, whose merchandise mimics the bright colors and clean-cut clothes at Tory Burch, has raged for months.

Nevertheless, Tory Burch is still resisting a legal tussle, hoping Christopher Burch will change the merchandise, logo and look of the store so it is less “confusing” in its similarity to Tory Burch, a source said.

“No investor is going to come in [to buy the Tory Burch stake] while this C. Wonder situation remains unresolved,” according to one insider.

Another big stumbling block, however, is price: Christopher Burch has demanded nearly $600 million for his stake, according to people briefed on the situation.

That lofty figure would imply an eye-popping value for the company of about 14 times its roughly $140 million in Ebitda, or earnings before interest, taxes, depreciation and amortization.

“Basically, he’s been holding his stake for ransom,” according to one source close to the talks. “It’s very difficult for a lot of people to take a number like that and make it work.”