Kenneth Cole Productions made its mark in footwear, then stepped out far beyond the shoe.
Although Kenneth Cole Productions has become a publicly traded megabrand complete with apparel, fragrance and a wide range of other categories, the heart of the company remains accessories, especially footwear.
In the 1970s, before he started his own brand, Kenneth Cole worked at his father’s shoe company in Williamsburg, Brooklyn, where he learned the ins and outs of the footwear business. Shoes, in many ways, remain a family affair, as Kenneth Cole’s brother, Neil, is chief executive officer of footwear and apparel firm Candie’s Inc.
Cole began his namesake company 20 years ago as a footwear firm, and for the first five years, shoes were the company’s sole pursuit. But the Eighties were all about licensing and as fashion companies of all stripes expanded their brands by adding licensing partners, Cole began to build his fashion empire. In 1988, the budding firm inked a deal with Blum Companies for handbags, marking its first foray into other product categories, and into what was a natural product extension for a footwear brand. It took only two years for KCP to acquire Blum, and Paul Blum, whose family owned the Blum Companies, quickly became a key executive at Cole. He’s now president of KCP.
“We acted as a platform for the licensing business,” Blum said recently in a phone interview, reflecting on his early days working with Kenneth Cole. “From the beginning, Kenneth developed his business as a branding business. Even as the first licensee, I recognized that it was much more than shoes he was creating. He is not very product specific.”
In adding new licenses, Cole has sought to expand its product offerings while maintaining cohesiveness and brand identity. During the Nineties, the firm added a wide range of accessories and categories, including watches and outerwear, as well as eyewear and cold-weather goods, and there are now more than 20 product categories in its fold.
Handbags and shoes remain the only products that are produced in-house and that it wholesales directly. KCP’s wholesale business remains the biggest chunk of overall sales. In the six-month period ended June 30, wholesale sales grew 10.1 percent to $118 million, driven by increased sales in the Reaction Kenneth Cole and Unlisted brands, the firm’s two diffusion lines.Licensing, however, continues to become a more important part of the overall business. Royalty revenues from licensing grew 44.8 percent to $16.8 million in the six-month period, and the firm said the increase was driven by fragrance and jewelry, as well as men’s and women’s sportswear. The company’s total revenues for the six-month period were $207 million.
The company prides itself on working closely with its more than 20 licensing partners to ensure a similarity in feel between its various product categories. All of the products reflect Cole’s signature motif: urban and chic styles that don’t break the bank. In footwear and handbags, that means plenty of leather and suede, which is updated each season with elements such as fringe, beading and hardware, depending on the trends that season.
“We spend a lot of time with our licensees,” Blum noted. “We have been successful because we know that each one needs to be a stand-alone business, yet at the same time there needs to be a common thread and coordination.”
And the firm continues to add new categories, including fragrances, swimwear and jewelry, which was relaunched earlier this year under a new licensing agreement with Liz Claiborne, which also makes Kenneth Cole New York and Reaction sportswear. The products include fashion-forward beaded necklaces, dangly earrings and cuff bracelets.
Blum said one goal for the company now is to continue building the Reaction and Unlisted brands, which are not in as many product categories. The international arena is seen as another area where Kenneth Cole sees potential, he said.
“I feel we are a young brand,” noted Blum. “And the way we use Kenneth’s voice and humor creates more of an umbrella brand. It transcends fashion.”
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