Kate Spade & Co. is entering India, and will have a presence there later in 2016.
The company disclosed the news on the same day it posted mixed fourth-quarter results.
For the three months ended Jan. 2, the company saw net income fall 51.4 percent to $61.5 million, or 48 cents a diluted share, from $126.5 million, or 99 cents, a year ago. The year-ago period included operations that are now being wound down.
Last year, the company said it was shuttering Kate Spade Saturday, brick-and-mortar stores for the Jack Spade business and Kate Spade Brazil, as well as adjusting its Adelington Design Group operation as the company shifted its focus to expand product categories for its core Kate Spade brand and to grow overseas.
On an adjusted basis, the company met Wall Street’s earnings per share expectations of 32 cents, versus the year ago EPS of 24 cents. Net sales for the quarter rose 7.6 percent to $429 million from $399 million a year ago, and up 14 percent on an adjusted basis when excluding sales from the wind-down operations. The company said direct-to-consumer comparable sales growth rose 14 percent for the quarter.
Kate Spade’s entry into India will be in partnership with Reliance Brands Ltd. Reliance is a subsidiary of Reliance Industries Group and is the retail partner-of-choice for many brands in that market. Reliance is slated to open a network of standalone Kate Spade New York stores in major Indian cities.
Craig A. Leavitt, Kate Spade’s chief executive officer, said expanding into India is an important next step for the company as “we continue to progress along our geographic expansion axis of growth and build global brand engagement. With India’s rapid development and increasingly aspirational consumers, we see significant growth opportunities in the region in the long term.”
International has been a continuing focus of the company for growth. In the quarterly report, the company said sales for Kate Spade International, excluding sales of wound-down operations, grew 18.7 percent to $51 million for the quarter. The adjustment excludes the conversion of the Hong Kong, Macau and Taiwan territories to a joint venture, as well as changes in foreign currency exchange rates in 2014. On a GAAP basis, the sales were $52 million, a decline of 13.3 percent.
The company has 22 Kate Spade New York freestanding stores overseas, 52 concessions and 13 outlet stores, and the average retail square footage for Japan and Europe was 77,000 square feet, an increase of 12.3 percent compared with 2014.
Kate Spade North America saw sales up 14.9 percent to $371 million, excluding wind-down operations. On a GAAP basis, sales rose 13.6 percent to $371 million. There were 2,014 freestanding stores and 64 outlet stores in North America, with the average retail square footage at 377,000 square feet, a 10.9 percent gain from 2014.
Leavitt said of the company’s results that the firm’s “quality of sale efforts are successfully fueling brand aspiration and our channel-agnostic approach was a key driver of growth both during the fourth quarter and throughout 2015.”
The ceo added that the company will continue the momentum in four category pillars created in 2015 – women’s, men’s, children’s and home.
Investors liked the news, sending shares up 11 percent Tuesday to close at $21.99 in Big Board trading.