Investors overlooked continued weakness at Fifth & Pacific Cos. Inc.’s Juicy Couture business and focused on the prospects of Kate Spade, driving shares of the company up 11.5 percent Monday.
Kate Spade carried the firm this year and is expected to do the same next year. Investors have pushed to free more of Kate Spade’s financial potential by spinning off at least a piece of the business. And William L. McComb, chief executive officer of Fifth & Pacific, said management was at least open to the notion of a different corporate structure.
“The management team and board of directors of Fifth & Pacific are committed to delivering value to our shareholders,” McComb said. “This includes making resource allocation decisions today that support strong long-term growth within our current strategy as well as being thoughtful regarding alternatives to our current multibrand portfolio approach that unlock value."
Shares of the company gained $1.47 to $14.31, giving it a market capitalization of $1.66 billion.
Fifth & Pacific expects 2012 adjusted earnings before interest, taxes, depreciation and amortization of $100 million to $105 million — with $94 million to $95 million coming from Kate Spade. Juicy’s adjusted EBITDA is expected to come in at $23 million to $24 million, and Lucky Brand’s at $34 million to $35 million. The company also registered adjusted corporate losses of $69 million to $70 million.
In the fourth quarter, Kate Spade comparable sales jumped 27 percent, while Juicy Couture comped down 2 percent. Lucky Brand showed a 3 percent comp increase.
McComb described 2012 as a year of progress tempered by “a miss in North America caused by merchandising and other issues at Juicy Couture that we believe are now being corrected under Paul Blum’s direction.” Blum is Juicy’s recently appointed ceo, and McComb said the label’s fixes wouldn’t take hold until late this year.
This year, Fifth & Pacific is projecting adjusted EBITDA of $120 million to $150 million, with Kate Spade contributing $130 million to $140 million.
Many investors see Kate Spade through the lens of Michael Kors Holdings Ltd.’s ultrasuccessful 2010 public offering or compare the brand to Tory Burch, which sources say was valued at about $2.5 billion in a recent private stock sale.
Kate Spade is in the process of expanding its reach and named Mary Renner Beech senior vice president and chief marketing officer of Kate Spade New York.
She succeeds Kyle Andrew, senior vice president, Kate Spade New York brand marketing, who will launch the new brand, Kate Spade Saturday, as senior vice president/brand director.
Beech was most recently senior vice president, global licensing and franchise marketing for Disney and Pixar Animation properties, leading the global licensing, creative, marketing and product development team.
Beech will lead and oversee all marketing, creative, p.r. and advertising for the Kate Spade New York brand. She will also provide strategic support to the Jack Spade and Kate Spade Saturday brand marketing and creative teams, and will run global licensing and new business development for all three brands. She begins Jan. 22 and reports to both Craig Leavitt, ceo and Deborah Lloyd, president and chief creative officer.
In her new role, Andrew will oversee all aspects of the Kate Spade Saturday business, which was conceived and developed under her direction. Andrew will continue to report jointly to Lloyd and Leavitt.
In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
@maxmara’s classic 101801 coat was the cornerstone of its pre-fall 2018 collection. The design team expanded the traditional double-breasted, kimono-sleeved style into a trapeze coat, lean belted styles and a peacoat and presented them in monochromatic looks – like the camel one pictured here. #wwdfashion #prefall18 (📷: George Chinsee)
The @cfda has shifted the dates of #NYFW, with Men’s showing on February 5 through February 7, and Women’s will directly follow, running from February 8 through 14. The preliminary schedule will be released on the CFDA’s web site in the next few days, but Mark Beckham, VP of marketing for the CFDA, revealed that @rafsimons will be back to close the men’s-specific part of the week with a show on February 7 #wwdfashion (📷: Kelly Taub)
@ferragamo is introducing a new space dedicated to the development of women’s and men’s leather good samples. The laboratory, which is created eco-friendly materials and designed to reduce the environmental impact of the manufacturing processes, will allow the company to expand its accessories offering through traditional artisanal approaches. #wwdfashion (📷: @aitorrosasphoto)
How does a “regular, degular, schmegular” girl from the Bronx, N.Y., become a Grammy-nominated artist with a certified platinum record in less than a year? Call it the @iamcardib come up. The 25-year-old has become a musical sensation, and the fashion world is taking note. “If I could describe her style I would say drama. She’s really into the dramatics,” says Cardi B’s stylist @kollincarter. See how Carter styles her bold and out there looks with the link in bio. #wwdfashion
“There is no formula. There is no guideline. I can watch Ted Talks all day, but there is no one who can advise me on exactly what it is I should be doing,” said @ronniefieg, CEO of @kith, in an interview with WWD’s @ariahughes at the brand’s new SoHo office in Manhattan. Head to WWD.com to see how Fieg went from hanging out in shoe stockrooms at 13 to building his own business. #wwdfashion (📷: @weston.wells)
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion