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Kate and Andy Spade Exit Brand

Husband-and-wife team Kate and Andy Spade are saying goodbye to their brainchild.

NEW YORK — Husband-and-wife team Kate and Andy Spade are saying goodbye to their brainchild.

Following the expiration of the service agreement the duo had with Liz Claiborne Inc. after the $4.99 billion vendor acquired the accessories brand last November, the Spades will step down from their respective roles as designer and chief executive officer at the end of next week at the close of spring market.

The Spades cited personal reasons for leaving their day-to-day roles, including a desire to spend time traveling with their two-year-old daughter.

They will stay on as members of the brand’s board, which will also include Claiborne ceo William L. McComb, executive vice president of Claiborne’s direct-to-consumer division Jill Granoff, the new ceo for Kate Spade — whom the company is searching for and hopes to announce after Labor Day — and possibly a head designer or creative director, for whom the company is also searching.

“This is a hard decision, and I feel very emotional about it,” said Kate Spade in an interview Thursday. “But the emotions would be more about melancholy if I thought we weren’t doing the right thing. We are with the right partners — we wouldn’t make this decision otherwise. This an opportunity for employees, the fabulous teams we have in place, to take the baton and run away with it.”

The Spades, along with partners Pamela Bell and Elyce Arons, founded the firm in 1993. Last November, Claiborne bought the New York-based accessories brand from Neiman Marcus Group (which had owned it since 1999) for $124 million, including the retirement of debt at closing. The couple’s six-month service contract, which it had originally drawn up with former owner Neiman Marcus, expired in mid-June, but the Spades committed to stay on until the end of spring market. They said they had always planned to ease off their roles post-acquisition to take time for their family.

The Spades will leave for their annual August trip to Napa, Calif., next week and after that will transition into an advisory role at the company. Andy Spade will stay on until the end of 2007 to work on the brand’s ad campaigns, oversee Jack Spade and craft the store displays.

Their exit comes at a pivotal time for the company, just as Claiborne has put the accessories brand on a course for fast growth. “This has been something I’ve struggled with for the last six or seven months, but this isn’t a situation where we are losing the founders,” McComb said in an interview. “They so embody what the brand ideal is, and they have created very scalable DNA. I am very comfortable we can build right on top of what they have been very successful at.”

Kate Spade was Claiborne’s first acquisition after McComb became ceo, and he quickly identified it as a “power brand,” putting it in the company of Juicy Couture and Lucky Jeans Brand. The power-brand designation moved to direct-to-consumer designation this summer.

Claiborne projects Kate Spade will do $90 million in volume this year, with $35 million in wholesale at 210 doors, $35 million at retail from 26 Kate Spade doors, $10 million from 14 outlets and $10 million from e-commerce. Claiborne sees the business almost quadrupling to between $250 million and $350 million by 2010, thanks to predicted 50 percent annual growth. To achieve that, Claiborne plans to add 80 Kate Spade stores in the next three years, and return focus to the brand’s accessories roots.

Andy Spade said he and his wife fully endorse the direction Claiborne is taking their brand, and that they will “be as involved as we need to be” going forward. “It’s our name, and we will be haunting them forever to make it right,” he said. “It’s our turn to take a break, though. We’ve been working straight for 13 years now.”

The couple said they have no other business plans at this point.

McComb said Claiborne will have “a long ongoing relationship” with the Spades, which could even expand beyond the Kate Spade brand. “We have a relationship that can turn into other kinds of ventures,” McComb said. “I keep trying to bait these guys to start another concept with us.”