Kate Spade: A Journey From Burlap Sack Bags To $2.4 Billion

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1995 will be best remembered by fashion as the year of Kate Spade’s iconic ‘Sam’ Handbag. Simple and sophisticated, this boxy bag was made from nylon and bought by women who believed that it was the bag that would help them transition into adulthood. 

Kate Spade’s popularity can be attributed to her clean and vibrant designs, a welcome change from the avant-garde and busy silhouettes of the 90s. As a result, the brand’s sales jumped from $100,000 in 1993 to $1.5 million in 1995. By 1998, the sales had skyrocketed to $27 million. In the absence of Instagram, Twitter, Pinterest, and Snapchat, Kate Spade’s customers built a fashion community united in their love of the designer’s aesthetics. 

Christina Binkley, Wall Street Journal’s fashion and style columnist said it best when she wrote, “The purses became something of a handshake. When two women met and saw they were both holding Kate Spade bags, they’d nod at each other and understand they were on the same page. It was very chic.”

Vogue’s editor-in-chief Anna Wintour also reminisced about the time when it was difficult to walk a block in New York without seeing one of Kate Spade bags. 

So it came as no surprise when the luxury brand’s founder Kate Spade passed away in June 2018, an extraordinary number of women expressed their sadness of losing someone who helped them to feel like a grown up and impacted their personal style. For many, it was their ‘first bag’ that they saved up for.  

“It’s like that bag had superpowers and every time I carried it, there was a bit more swagger in my walk. I was a New Yorker now, and I could take on anything in my path… Spade’s designs could do just that, but, with most early styles clocking in at under $200, they also never felt too exclusive or out of reach,” wrote Abby Gardner. 

The adulation that the American designer and her creations garnered in such a short span of time is rare. It is even rarer to build a luxury brand that is premium but attainable. How did Kate Spade create an attainable luxury company that resonated with so many women across the globe?

How She Got It Done

Born in Kansas City, Missouri, Kate Spade (then Kate Noel Valentine Brosnahan) met her husband and co-founder Andy Spade while studying at the Arizona State University in the 80s. After leaving college, backpacking in Europe and working as a typist, Kate bagged an assistant’s job at Conde Nast in New York. Meanwhile, Andy was still finishing his credits at the university along with floating an ad agency. Their initial plan was that Kate would move back to Arizona after spending three months in New York. But the designer fell in love with the city and her job, so Andy moved in with her instead. 

Kate acquired knowledge about fashion accessories (bags, in particular) and how to be resourceful while working at Conde Nast’s fashion magazine Mademoiselle. She started off as an assistant to the senior fashion editor, and then was promoted to associate editor, and later as a senior fashion editor. 

In 1991, she left Conde Nast after talking to Andy about her reluctance to become the magazine’s Fashion Director. It was Andy who suggested that they should start a handbag company. When asked why handbags, Andy revealed in NPR’s How I Built This podcast, “She was an accessories’ editor and she collected handbags for fashion shoots that was one of her key responsibilities… She knew every handbag company in the market. And she understood it better than anyone what’s missing in the market.”

“At the time, things were very…bags were too complicated. And I really loved very simple kind of architectural shapes. And I would wear these very simple shapes, none of which were famous designers. And I thought, gosh I mean why can’t we find something just clean, simple and modern,” Kate shared when asked about what was missing in the handbags market. 

This simple conversation laid the foundation of the luxury brand, which they decided to name ‘Kate Spade’ by blending their names. It was launched in 1993 and had two sweat equity partners, Pamela Bell, and Elyce Arons.

With no background and experience in designing bags, Kate started the design process by cutting big sheets of white paper in the shapes she wanted and approached a pattern maker that helped them to make samples out of muslin. 

The duo failed to source a fabric supplier who was willing to sell material less than 100 yards long (they only needed about 20-25 yards to make 6 bags). In the end, it was a potato sack company that they found in the Yellow Pages who provided burlap cloth. And that was Kate Spade New York’s first collection made from burlap with raffia fringe and webbing handles. 

Kate and Andy showcased this burlap collection at the Jacob K. Javits Convention Center in New York, where they bagged the first two buyers – Barneys in New York and Fred Segal in Los Angeles. 

New Beginning with Frances Valentine

In spite of the popularity, the first few years were a struggle because of which they contemplated shutting down the company. 

They were still not profitable, but fashion editors and large department stores like Saks and Neiman Marcus changed the fate of Kate Spade New York. But it was winning the Council of Fashion Designers of America’s award for New Fashion Talent in Accessories in 1996 that made the fashion world finally sit up and take notice. 

Until 1999, the company remained self-funded, with Andy largely funding the company. However, they sold 56% shares of their business to the Neiman Marcus Group for $34 million in 1999. This investment deal allowed the brand to branch out into other categories like developing a line of bath and body with Estée Lauder in 2002. And, home goods with Lenox a year later. They also designed airline uniforms for Delta Airline’s new venture. 

They sold the remaining 44% stake to Neiman in 2006. 

Kate and Andy Spade left the company in 2007 when Neiman sold the company to Liz Claiborne. In 2017, American multinational luxury fashion company Tapestry purchased Kate Spade New York for $2.4 billion!  For a company that was started with a few yards of potato burlap sack fabric, entering the billions club valuation was a huge achievement.

Kate returned to the world of glamour and fashion in 2014 with a new brand ‘Frances Valentine’ and the same team (minus Pamela Bell and a new partner Paola Venturi). Besides bags, the company features Kate’s unique designs and aesthetics in the form of shoes, jewellery, and clothes.

She also legally changed her name to Kate Valentine to create separate brand identities. It was amazing to witness how committed she was to the new label and how she disconnected herself from the original label. 

“It really was to distinguish the name and separate the two worlds. Obviously, we’re super proud of Kate Spade, and we want to be respective of both,” the designer asserted. 

She also shared, “I always had a good way of disconnecting myself from the company. I feel proud of what we built, but I’m in a different place. I wasn’t competing with my namesake. It’s not hard for me at all. I think it’s harder for other people.”

Kate Spade Without Kate Spade

One can’t take away Andy Spade, Pamela Bell, and Elyce Arons contribution in building the Kate Spade New York brand and now Frances Valentine. Neiman Marcus, fashion editors and other department stores like Barneys too helped this small company to stand out amongst Ralph Lauren, Calvin Klein, Gucci, and Donna Karen. 

But Kate Spade was and continues to be the soul of the company. It was her design sensibilities that revolutionized the 90s and disrupted the luxury accessories industry by making designer bags accessible. Therefore, it is reasonable to wonder about the brand’s future in a world without Kate Spade. 

By looking at the reaction on social media, it is clear that without any aggressive marketing campaigns, advertisements and social clout, ‘Kate Girls’ have remained loyal to the brand. The designer was able to create a unique brand identity, which has allowed her successors to run the company smoothly. Kate Spade’s brand recall is exceptionally high. 

Back in 2011, when the Spades had left Kate Spade New York, the company’s CEO Craig Leavitt had said, “We are really fortunate that we had already developed an authentic voice and persona for our brand.” 

The company’s current Creative Director Nicola Glass who presented the Kate Spade New York Resort 2020 collection asserted, “What has been interesting is even just seeing girls around the office who you’d call real ‘Kate Spade girls’ and love the brand before, but seeing them really experiment and transition into different silhouettes in the ready-to-wear. Seeing our existing customers responding has been really exciting, but I think with the ready-to-wear we’re starting to attract a different customer as well.”

They also released their first advertising campaign, revamped their website and social media. 

On the other hand, Frances Valentine revived Kate’s iconic Sam bag, by renaming it as the Kate bag to honor her, her ideas and designs. The bags are still boxy, clean, colorful and simple, just the way she designed it in 1993. They also don’t plan to onboard an investor so that they can control the pace of growth and expansion without external pressure. 

The designer’s friend and business partner Elyce Arons also shared that, “We have an enormous conceptual library of Katy’s work that’s yet to be realized. We intend to keep her creativity and designs alive in Frances Valentine.” Kate has left four completed seasons of a fashion collection, in addition to a bank of creative concepts for the label. 

The strength of this brand lies in not falling into the trappings of fashion trends. The bags created by Kate were never too small, too big, or too trendy. The designs were always balanced in terms of colors, silhouette, functionality, and prints.

“If it’s not too in, it can never be out… That’s what allows it to assume the personality of the wearer and not of me saying this is what I think,” Kate had pointed out rightfully. That’s how the designer was able to deliver an impeccable customer experience that has stood the test of time. And this very design principle is most likely to drive the growth of both, Kate Spade and Frances Valentine. 

In her tribute, Wintour wrote fondly about Spade’s authenticity and her inherent understanding of what customers want. She wrote, “Kate Spade had an enviable gift for understanding exactly what women the world over wanted to carry. She launched herat a time when everyone thought that the definition of a handbag was strictly European, all decades-old serious status and wealth. Kate designed with great charm and humor and built a global empire that reflected exactly who she was and how she lived. Long before we talked about ‘authenticity’, she defined it.”

As long as the people who are now entrusted with the responsibility of running her companies remember this, Kate Spade’s spirit would continue to live on.