Liz, Juicy, and Lucky are out and Kate is in at Kate Spade & Co., a designer and marketer of accessories and apparel under the kate spade new york, Kate Spade Saturday, and Jack Spade banners. The company operates about 90 specialty shops and outlet stores in the US and abroad, and also sells apparel and accessories online and to department stores. It also owns the Adelington Design Group and supplies JC Penney stores with the Liz Claiborne and Monet jewelry lines. Kate Spade & Co. narrowed its focus and took the name of its best performing brand after spinning off Juicy Couture and Lucky Brands. To reflect its mono-brand focus, the company (formerly Fifth & Pacific) changed its name in 2014.
New York-based Kate Spade & Company rings up about 95% of its sales in the US.
The company has trimmed it operations from three premium global brands (Juicy Couture, Lucky Brand, and Kate Spade), each of which contributed roughly about a third of sales, to just one: Kate Spade.
Sales and Marketing
The company's marketing strategy spans direct mail, in-store events, and Internet marketing, including social media. It spent $61 million on advertising, marketing, and promotions in 2012, up significantly from $49 million in 2011.
The Kate Spade brand rang up about $462 million in sales in 2012, representing about 31% of its parent company's sales that year. Overall, Fifth & Pacific's sales declined by about 1% in 2012 versus 2011, and the company was unprofitable. While the company posted a loss of $74.5 million, it has made significant progress trimming its losses over the past four years, having lost more than $950 million in 2008. Increasing sales and gross profits at the company's Kate Spade and Lucky Brands segments have helped whittled down the loss.
The decline in sales in 2012 was due to brands that have either been licensed or exited. Looking at the performance of its core portfolio, Kate Spade posted a 48% jump in sales, due primarily to the addition of new stores abroad, while Lucky Brand's sales increased 10%. The laggard was Juicy Couture, which posted a 6% decline in sales in 2012 versus the prior year. Sales overseas climbed by nearly a third, while domestic sales fell 2%.
Along with its February 2014 name change, the company named a new CEO, Craig Leavitt, who is looking to take the Kate Spade brand global. To that end, the company recently acquired its Southeast Asia distributor to facilitate growth in a key market and established a new headquarters in Hong Kong to oversee its Asian expansion. In April 2014, the chain opened a new store in Tokyo's Ginza district. While the company plans to open a few more stores in Japan in 2014, it's primarily looking to boost productivity at its existing stores in Japan. Elsewhere in Asia, Kate Spade has plans to open eight to 12 stores in China.
The company has narrowed its focus considerably, having sold its Lucky Brand Jeans business to an affiliate of Leonard Green & Partners for $225 million. Earlier in the year it sold Juicy Couture to Authentic Brands Group for $195 million. Following the sale of Lucky, the company is left with kate spade, for which it has big plans.
Wellington Management Co. owns about 10% of Kate Spade's shares.