Kate Spade has a theory for growth — with a focus on retail.

This story first appeared in the March 12, 2008 issue of WWD. Subscribe Today.

Liz Claiborne Inc. has hired Craig Leavitt as the $90 million accessories brand’s co-president and chief operating officer to help triple Kate Spade’s sales by 2010. Leavitt previously was president of Theory’s global retail.

Starting in mid-April, Leavitt will join co-president and creative director Deborah Lloyd, formerly Banana Republic’s executive vice president of product design and development, at the helm of Kate Spade, the smallest of Claiborne’s direct brands on which the vendor is hinging its future.

Both Lloyd’s influence on the product and Leavitt’s impact on the stores will be fully in effect by spring 2009, they said. Like the product, the retail experience “needs a little bit of work,” in Lloyd’s words. Over the next few months, the co-presidents will work together to create a five-year plan that will include a schedule for product category launches covering apparel, jewelry, home, fragrance and other products.

“We want the stores to be as focused as possible, so customers can take in the product when they spend time in the store,” Leavitt said. “We’ll look at success factors from existing stores, plus consider additional product categories so the space and store plan reflect what needs to come.”

Leavitt’s hire reflects the brand’s focus on retail growth. He spent three years leading retail operations at Theory, during which time the contemporary brand’s retail doors more than doubled to 19. From 2001 to 2005, he worked at Diesel, rising to executive vice president of sales and retail, and prior to that, spent 16 years at Polo Ralph Lauren Corp., ultimately as executive vice president of retail concepts.

Since Claiborne bought Kate Spade in November 2006, the brand has gone from seven stores to 26, with 24 more planned this year — and plans for 40 more by 2010. Claiborne chief executive officer William L. McComb acknowledged the $4.99 billion firm was not only pumping more money into its four direct brands (Juicy Couture, Lucky Brand and Mexx round out the group), but also specifically investing more money into those brands’ retail operations. Since the summer, Kate Spade has shifted from approximately equal parts wholesale and retail to about 60-40 retail to wholesale.

“This business is in some ways like a start-up,” said McComb of Kate Spade. “I call it ‘sleeping beauty.’ It’s not tarnished, but it didn’t participate in the roaring growth of the accessories era, which actually allows the brand a freshness.”

Kate Spade defined itself about 15 years ago with its competitively priced designer bags. But the brand didn’t boom like Coach, nor did it create a niche following like new brands such as Kooba and Botkier. Some retailers have criticized Kate Spade for lack of freshness in its product, and McComb, Lloyd and Leavitt all agree that fixing the core accessories is their first and most important task.

After that will come adding other product categories, which will be appearing in bits by the end of the year, like more apparel items, jewelry and home fragrance, before full collections start to appear, possibly as early as 2009.

Leavitt and Lloyd report directly to McComb. After taking her post in November, Lloyd worked with McComb to interview candidates for the search, conducted by Karen Harvey Consulting Group.