The fashion world lost an icon this week with the sudden passing of Kate Spade. Fashion can be a spiteful industry, yet when the life of one of its brightest stars ends abruptly, there is only an outpouring of grief. When the public’s emotion settles, however, concerns will be raised over the future of this this multi-billion dollar brand. In this article we’ll explore how she built her design empire, skillfully maneuvered her brand to prominence, and will offer projections on its future.
Over the last 35 years many women-run enterprises in the fashion and entertainment fields have met with extraordinary success. One of the first was Kate Spade. Ms. Spade positioned herself as her brand’s ambassador and leveraged her company through a succession of buy-outs. In each negotiation, however, she retained design and quality control. Kate Spade was not only the eponymous brand but also its high-profile face. Ms. Spade made appearances on red carpet events around the world. A published author, she also kept a hectic schedule of book signings across the country. As such she was widely recognizable, even by those who do not own her merchandise.
No firm starts its life as a global lifestyle brand. In fact, Kate Spade did not study design in school, nor intended to become a designer. She majored in journalism and after graduation logged six-years at Conde Nast’s Mademoiselle magazine. Dining out one night with her husband, Kate was intrigued by his suggestion that she start her own handbag design business. To date Ms. Spade had never so much as sketched one, but she set about researching and designing the ‘perfect’ handbag, originally of ballistic nylon with leather straps. With her husband as her business partner, and upper middle class women as her demographic, in 1993, Kate Spade, the business, was launched.
Building the Brand
Kate Spade’s designs addressed the needs of the 24-hour professional woman. The woman who gets the children off to school and herself to work, to the gym, shops for groceries, takes her vitamins, and looks fit and refined while executing all the required tasks of modern day family life. The Kate Spade woman takes care of herself, top to toe and inside and out. Soon there was a Kate Spade handbag for every one of these personas. Sales soared and investors took notice. A combination of customers and a recommendation that stock in her publicly-held company was a good buy provided the catapult the brand needed.
By 1998 sales totalled $27 million, which attracted Neiman Marcus as a business suitor. That year the luxury retailer paid $34 million for a 56% stake of the company. The brand flourished under this new partnership. By 2006, sales reached nearly $99 million, and Neiman Marcus Group acquired the remaining 44% of Kate Spade for just under $60 million. By the early 2000s, Kate Spade expanded its reach worldwide and its line to include stationery and desk essentials, shoes, beauty products, eyewear, as well as a full women’s clothing line. In November 2006, Liz Claiborne Inc. purchased Kate Spade for $124 million from Neiman Marcus Group. Last July, Tapestry, Inc. (formerly known as Coach, a rival handbag and lifestyle brand) acquired Kate Spade for $2.4 billion.
While the loss of this dynamic talent is devastating, Kate Spade the brand, will likely continue to evolve and gain even greater market share. That is because the most successful brands are structured for continuum. They are businesses, after all. That is, should their CEO, brand icon, or lead designer leave, the enterprise locates another rising star to continue designing the line in the style of the founder. Some well-known examples in this very industry include Yves Saint Laurent, and Anne Klein. On his retirement, Saint Laurent, the icon of French haute couture was superseded by Karl Lagerfeld, his long-time design rival. And after her death, Anne Klein’s label, once solely available at high-end retailers and her upscale boutiques, branched into several lower priced ready-to-wear lines, including a label for plus sizes and petites. These lines’ evolution demonstrated that fashion is big business and the show will go on.
Perhaps the greatest legacy that Kate Spade, the designer has left us is the fact that through her determination, drive, and her thorough knowledge of her demographic, she grew her brand by delivering products that they both need and most important, want. By following this blueprint, the successors driving her design empire and brand will likely surpass even the greatest dreams and ambitions of its founder.