Kate Spade LLC

International Directory of Company Histories, Volume 68 (1997) by Ed Dinger

kate spade LLC

48 West 25th Street New York, New York 10010-2708 U.S.A. Telephone: (212) 739-6650 Fax: (212) 739-6544 Web site: http://www.katespade.com

Private Company Founded: 1993 Employees: Not available. Sales: $125 million (2003 est.) NAIC: 316992 Women's Handbag and Purse Manufacturing

Based in New York City's garment district, kate spade LLC nurtures the emerging Kate Spade lifestyle brand. Originally focusing on handbags, Kate Spade is now also involved in stationery, shoes, raincoats, pajamas, eyewear, beauty products, and homewares. In addition, the company has branched into book publishing and music. Kate Spade products are sold in upscale department stores as well as 15 company-owned boutiques. The people behind the Kate Spade vision are wife and husband, Kate and Andy Spade. The company is majority owned by The Neiman Marcus Group, Inc.

1980s Origins

Kate Spade was born Katherine Noel Brosnahan in 1962 in Kansas City, Missouri. Her father owned a construction company and her mother was a housewife. She was not especially interested in high fashion growing up, preferring, rather, to visit a vintage shop to pick up items that her mother might have worn in the 1950s or 1960s. These styles she would eventually emulate when she became a designer. In the meantime, she went to college at Arizona State University in the early 1980s and majored in journalism. At school she found part-time work in a men's clothing store, where she met another Arizona State student, Andy Spade. They began to date and soon became a couple. He had grown up in Arizona, encouraged by his parents to be creative and follow his own path. Even in college he displayed an entrepreneurial spirit, launching a successful advertising agency with a friend. In 1986 Phoenix Magazine named it one of the top 50 new Arizona businesses.

After graduating from college in 1985 Kate, Andy, and a friend, Elyce Arons, planned to tour Europe together. But Andy had to stay in Phoenix to run his business and Arons opted to move to New York to begin her career. Kate traveled on her own and when she returned to the United States she had just a few dollars in her pocket. She stopped to visit Arons in New York and applied at a temp agency to make some quick cash. The next day she was called in to work at Conde Nast, where she was assigned to the fashion department at Mademoiselle magazine. After the assignment was over, she elected to stay on as assistant to the senior fashion editor. Andy then sold his share in the advertising agency and relocated to New York to move in with Kate, and he quickly found work in advertising as a copywriter. He worked for a number of agencies, ultimately becoming a creative director. At Mademoiselle, after six years, Kate rose to the position of Senior Fashion Editor/Accessories, but she began to have misgivings about the career track she was on. The couple, still not married, began thinking about starting a business together. Because Andy was regarded as the creative one, Kate assumed that he would come up with a product and her task would be to sell it. But because they would need to depend on his income from advertising, they could not afford to have him quit his job. According to Kate, as told to Fortune Small Business, Andy said, "What about handbags? You love them."

Debut of Kate Spade Bags in the Early 1990s

Kate Spade bags made their debut at a 1993 trade show in New York's Jacob Javits Center. The fledgling company was granted space in a far corner of the building, and rather than spending money on commercial displays, Kate trucked in furniture from the couple's apartment. Despite these limitations, she was able to attract the attention of a buyer from a pair of influential New York department stores, Barney's and Charivari, who bought the bags. Even then, Kate did not recover the cost of the show. But it was an important start as the stores quickly sold the bags and ordered more. At the next accessories show where she presented her next collection, Kate simply used the same shape with different fabric. The Barney's buyer considered the new bags to be no different from the first bags, and Kate had to explain that retaining the shape was the concept—it was her signature. The most distinctive change from the first collection was the presentation of the logo, "kate spade new york," attached to the bag's exterior as an accent. In fact, on a whim the day before the show, she removed the tags from the interior and stayed up all night sewing them on front. Barney's agreed to buy 18 of the bags, but only if the tags were returned to the interior. In a stroke of good fortune Vogue covered the show and featured the bags in an accessories layout. Customers came into Barney's looking for the Kate Spade bags with the logo on front, quickly forcing the store to reverse course and insist that Kate Spade return the tags to the exterior. As a result, the bag's accent began to build the Kate Spade brand name.