THE SPADE ASCENT
HANDBAG COMPANY KATE SPADE PLOTS ITS GROWTH WITH NEW PRODUCTS, RETAIL AND LICENSING DEALS.

Byline: Wendy Hessen

NEW YORK — Kate Spade is a company at a crossroads.
Since its shoestring start-up four years ago by former fashion editor Kate Brosnahan and her then-boyfriend Andy Spade, the handbag firm’s signature collection of simple, chic fabric totes and backpacks has been widely accepted by fashion-forward retailers and consumers around the country. As a result, sales topped $10 million in 1996 and are on target to reach $25 million this year.
Now, the company has embarked on a series of ventures that could move the label from its self-described minibrand status into a major player, here and abroad. Among the moves:
The first Kate Spade collection of leather handbags and small leather goods premiered at the August accessories market to rave reviews from retailers.
In April, the firm signed a far-reaching manufacturing, distribution and licensing deal with Itochu Fashion System and Sanei International, which will ultimately allow for a total of 10 freestanding stores and 29 in-store shops throughout Japan.
At press time, the second American Kate Spade store — at 454 Broome Street in SoHo — was due to open its doors after outgrowing its first, a 400-square-foot shop on nearby Thompson Street, in just over a year.
A 1,500-square-foot unit is scheduled to open in January on trendy Robertson Boulevard in Los Angeles, and there are other units on the drawing board.
Its first national advertising campaign is about to be launched in the U.S. and in Japan, in magalog form and in print and outdoor media.
Spade expects to sign a licensing agreement for its first collection of eyewear by the end of next year.
Based on the successful response to non-accessories items sold in the store, the company is taking its first steps toward what is expected to become a full-fledged clothing line.
To protect its burgeoning brand image, the company has also begun aggressively pursuing companies that infringe on its designs and thus far has settled cases against such major retailers as Gap, Dayton Hudson and Kmart and maker Accessory Network.
In short, Kate Spade is becoming a model — albeit a slightly quirky one — of a powerhouse brand-in-progress, a company that understands what it is about and sees ample opportunity to expand that concept around the world.
Andy Spade, company creative director and now the designer’s husband, said the label is evolving into an appealing, almost down-home lifestyle brand, from purely a functional handbag company.
“We call our pieces distorted classics,” he said. “They represent an eclectic mix of things we really like. We’re not trying to sell them in an edgy way either. We think our Midwestern sensibility and being charming and polite can be really cool and modern, too. It’s pervasive in everything we’re doing — we’re not 100 percent there yet, but are moving toward that concept.”
The leather handbag line furthers the philosophy.
Designer Kate Spade said she decided to launch a leather version of her signature bags because “there wasn’t one leather handbag that I really wanted to carry.
“We’re looking to capture the same market we have with the fabric bags — simple, strong, understated and functional, but with a level of fun and style not seen in other functional bags,” she said.
According to industry sources, the Kate Spade leather collection was the subject of some hefty competition between stores during the August accessories market.
In fact, the company ran out of its initial allotment of leather prior to showing it to all stores. Bergdorf Goodman, Barneys New York and selected locations of Neiman Marcus and Saks Fifth Avenue will have the line when the first deliveries hit the selling floor in November.
The leather bags echo the simplicity of the fabric line. All feature black Miora Italian leather with off-white stitching and come in six signature shapes and sizes of the classic shopper style, the Caroline bucket, zip-top Clair and rectangular Sam shapes. There are also 13 small leather accessories.
Wholesale prices range from $152 for the signature small shopper to $226 for a medium shopper tote. Small leather goods range from $41 to $151.
The first phase of retail openings have taken place under the auspices of the development deal with Itochu. The Sept. 26 opening of the freestanding Kate Spade store on Tokyo’s Fire Street was the culmination of a series of events in Japan that also saw the opening of six in-store boutiques as well. Twenty more are planned for openings in Japan next year.
In the U.S., after settling into the Broome Street site and getting the Los Angeles store off the ground, Andy Spade said San Francisco and Chicago will get stores of roughly 1,200 square feet in 1998. All retail operations are being overseen by the company’s recently appointed director of retail planning, Julia Leach, a former associate of Andy’s during his days as creative director at ad agency Chiat Day.
Besides the array of Kate Spade handbags, accessories and travel pieces, the store and boutiques also carry a variety of items not yet available in the familiar assortment seen in U.S. stores.
Andy Spade said the item-based, well-edited line of clothing and accessories opened with about five pieces in the Japanese locations, with sell-throughs exceeding the plan.
“We focused on categories that don’t have a great staple look,” he said. “There will be one or two great pants silhouettes, two shirts, a trench coat, a dress, a scarf and a hat. We also did some knit tops and a classic tennis sweater. We’ll change fabrics and details seasonally, but these are shapes that should last at least five years.”
In the U.S., Barneys New York is testing a few pieces, and in January, Saks Fifth Avenue’s store here will have the first dedicated Kate Spade area.
The Kate Spade collection is sold here through the Cynthia O’Connor showroom.

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