Kate Spade & Co. is going deeper into the personalized accessories market.
The company has acquired the intellectual property and related business assets of the Bag Bar business from D.H. Deesigns LLC, which is headed by founder Dee Ocleppo Hilfiger. Bag Bar is an accessories brand that offers customers the ability to add interchangeable covers and accessories to classic handbags, combining functionality and style. The price of the acquisition, which closed Tuesday, wasn’t revealed.
Beginning in 2017, select Kate Spade New York handbags will incorporate Bag Bar’s technology and offer customizable options for a number of handbag silhouettes. The new system will allow Kate Spade customers to personalize their handbags according to their personal taste.
Mary Beech, executive vice president and chief marketing officer of Kate Spade, said, “The acquisition of Bag Bar’s customization system strengthens Kate Spade New York’s core handbag business, allowing us to respond to the desires of our loyal customers as well as new ones and offer an innovative, personalized way to customize their handbags.”
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Hilfiger said, “I founded Bag Bar on the concept of versatile luxury for women who live full, multifaceted lives and our goal was to turn it into the ultimate destination for customers to ‘BYOB’ — build your own bag. From an aesthetic, merchandising and storytelling point of view, Kate Spade & Co. is an excellent fit to bring this concept to market.”
The Kate Spade New York Bag Bar collection will be available at select Kate Spade New York stores and on katespade.com in 2017. Beech said it was too early to give specifics about what type of bags and materials will be offered or the price points, but said the system’s mechanism will allow them to change bags, in terms of colors, fabrics and day-to-night.
“There are a lot of options and we’ve only begun to explore them,” she said. Right now, Bag Bar is focused on handbags, but small leather goods could be a potential opportunity to explore.
Kate Spade already has other personalized products on the market, such as initial or zodiac sign jewelry (necklaces, rings, bracelets and charms), initial notebooks, stationery and tumblers, and select handbags and small leather goods in its Cedar Street handbag group that can be monogrammed.
According to Hilfiger, the decision to sell Bag Bar, which she introduced last summer, was at the suggestion of Gilbert Harrison, founder and chairman of Financo Inc. She said she showed him the concept of Bag Bar after initially discussing it with some retailers, who had a great interest in it. “However, the realization came to me quite quickly that it would have taken me years to build it and scale it, where Kate Spade could literally do that overnight,” explained Hilfiger.
She said Kate Spade understood the concept immediately and embraced the idea. “Honestly, from a design perspective, what Kate Spade does with their accessories is incredible,” she said, referring to their quirky personality. She said it wasn’t easy to give up the business, but she believes Kate Spade can take it to another level.
What’s unique about Bag Bar, which Hilfiger has patented, is that it allows customers to pick a bag size and color, and to decorate them with interchangeable covers and charms, all sold separately. In developing the concept, Hilfiger offered options such as fringe, grommets, ruffles, suede, antelope and ostrich, as well as such garnishes as bag hooks, leather tags, key chains and bag charms. Prices ranged from $295 to $695, and garnishes started at $45, while covers began at $150. The Bag Bar concept never went to market.
“The whole customization aspect is different from what I was originally doing [which was offering a reversible cover]. Customization is becoming important in the marketplace, particularly with accessories. It’s so saturated with sameness and knock-offs. Customization is a way for customers to have something that is uniquely theirs. They’re then invested in the final product and they engage in it,” Hilfiger said.
She won’t be involved with Bag Bar or Kate Spade, but retains her own luxury label, Dee Ocleppo. She designs handbags for stores such as Saks Fifth Avenue, Hudson’s Bay and Harrods, as well as her own Web site. The handbags are designed in exotic materials such as python, as well as leathers and furs, with an average retail price of $950 to $1,200, with some going as high as $2,500.
As for expansion into other categories, Hilfiger said she’s taking things one step at a time. “I am approaching that very gingerly as I’ve had experience, and the retail environment is quite volatile. I am going to take a breather, and do it very slowly and intentionally and with a lot of thought. One lesson that I’ve learned is you go forward very cautiously,” Hilfiger said. She added that building a brand is very costly, “and if you grow too fast, you can lose your shirt.” She has a small team and plans to keep it small.
Dee Ocleppo handbags hang near such designers as Alexander McQueen and Valentino. “I hope to slowly continue on that trajectory,” she said. She described her style as “very ladylike bags for a discerning woman who wears something well made and offer a different aesthetic from the five Hermès bags she already owns. Newness in the marketplace is what people are looking for. I like to think outside the box.” As a shoe and bag lover, she said footwear is something she would love to eventually design when the time is right.
Hilfiger said she was happy to spin off Bag Bar to Kate Spade, and although she declined to reveal the acquisition price, she added, “I am very pleased with the outcome. From a design perspective, they [Kate Spade] will be able to have so much fun with the concept and develop it in a bigger and better way than if I were to do it. It would have taken me many years and a lot of money.”
Financo’s Harrison added, “Dee is a very talented person and it’s great for her going forward and a great opportunity for Kate Spade.”
As a personal friend of both Tommy and Dee Hilfiger, he said he was talking with them about the Bag Bar brand and the growth of it. “We both came to the conclusion that the opportunity to take this to the next level would best be done with a larger entity,” he said.