Fifth & Pacific Companies (NYSE:KATE) has experienced a great run since the beginning of the year, going from only $12.50 per share to more than $30.40 per share at the time of writing. The incredible gain of Fifth & Pacific occurred because of its significant improvement in operating performance, driven by ongoing business restructuring.

Juicy Couture's divestment is the right decision
In the third quarter, the company recorded an 18% sales increase. Adjusted earnings before interest, taxes, depreciation, and amortization, or EBITDA, rose from $21 million in the same quarter last year to $25 million this year. The top line growth resulted from strong sales growth from both Kate Spade and Lucky Brand. Fifth & Pacific has been going through a business restructuring, divesting declining business Juicy Couture to focus on fast-growing Kate Spade.

Recently, Fifth & Pacific completed the intellectual property sale of the Juicy Couture brand to Authentic Brands Group for $195 million. In addition, the company entered into a short-term license agreement with the buyer to ensure the business transitions in an orderly fashion, which runs through the first half of next year. The proceeds from Juicy Couture's divestment will give Fifth & Pacific more power to expand the Kate Spade brand.

The fast-growing Kate Spade brand
The decision to focus resources and efforts on growing the Kate Spade brand is a good move. In the third quarter, Kate Spade delivered 76% sales growth with sales rising to $180 million, including $25 million in sales from Kate Spade Japan. Direct-to-consumer comps rose by 31%, while the comp sales of company-run retail stores experienced 22% growth.

The total number of points of sale at retail also soared from 103 last year to 196 this year. Moreover, new concept Kate Spade Saturday is expected to drive business growth remarkably. According to Fifth & Pacific, Kate Spade Saturday targets a younger consumer who will come back and shop more often. 

... But expensively valued?
In the future, Fifth & Pacific's operating performance will improve significantly. However, I think its stock price already reflects the improved business fundamentals. At $30.40 per share, Fifth & Pacific is valued quite expensively at more than 76 times its forward earnings. Compared to its peers Coach (NYSE:TPR) and Michael Kors Holdings (NYSE:CPRI), Fifth & Pacific has a much higher valuation. While Michael Kors is worth more than 23.80 times forward earnings, the valuation of Coach is the lowest at only 14 times forward earnings.

Michael Kors is for growth investors
Growth investors must be quite familiar with Michael Kors with its high growth potential. In the second quarter, the company delivered 39% growth in its top line, which rose to $740 million. The operating income experienced similar growth as it reached $221 million. Michael Kors had an operating margin of 30%.

Michael Kors has reported double-digit comparable-store sales growth in many important markets: 21% in North America, 45% in Europe and 15% in Japan. Michael Kors believes that Japan is one of the great long-term opportunities for the growth of its business. Currently, Michael Kors has 31 stores in Japan, and it expects to expand to 100 retail locations eventually. 

Coach pays a decent dividend yield
While both Fifth & Pacific and Michael Kors do not provide dividends to shareholders, investors might come to Coach if they want some dividends. At $54.10 per share, Coach offers investors a 2.60% dividend yield with a conservative payout ratio of 35%. The reason for Coach's lower valuation is that it has the lowest growth potential among the three.

In the first quarter of 2014, Coach's revenue dropped by 1% to $1.15 billion, whereas earnings per share came in at $0.77. While Coach reported sluggish performance in the North American market, the company would like to expand its business in Asia and Europe. It expects that it can deliver $530 million in sales in China by 2014, driven by double-digit comparable store sales growth. During the current fiscal year, Coach will open 70 wholesale and 10 retail stores across Europe. 

My Foolish take
Fifth & Pacific, with the divestment of Juicy Couture and its extensive efforts on growing Kate Spade, will experience growing operating performance in the future. However, the share price has become quite expensive. I would rather wait for a price correction before investing in Fifth & Pacific. Growth investors might consider Michael Kors, while income investors could find Coach a good play at its current price.