How Kate Spade’s Vision for Simple Bags Became a $2.4 Billion Brand

Kate Spade was a fashion dynamo who turned a cheerful vision of affordable luxury into a leading U.S. brand, but relinquished control before it became a commercial juggernaut.

Initially known for simple handbags in punchy colors, the Kate Spade New York label grew into a sprawling lifestyle brand that includes furniture, baby gifts and sneakers.

Spade walked away from her company more than a decade ago and was nurturing a new label before her death Tuesday in an apparent suicide.

— Starting the Brand

Not long after quitting her job as an editor at Mademoiselle magazine, Spade began her company with the help of Andy Spade, whom she later married. Andy Spade, who met his future wife at Arizona State University, put $35,000 from his retirement savings into the fledgling business. The couple introduced an initial lineup of six purses, including one later sewed using burlap fabric sourced from a potato bag maker. In 1996, the Spades opened a store in the SoHo section of Manhattan, and by 1998, the company was generating $28 million a year in revenue.

— A Big Sale to Neiman Marcus

The Spades sold 56 percent of the company to Neiman Marcus, the high-end department store, for nearly $34 million. The label spent the next few years expanding into other retail categories by entering licensing partnerships with Lenox’s home goods, selling luxury diaper bags and strollers, dressing flight attendants and immortalizing its preppy Upper East Side aesthetic in $70 coffee table books. The company also faced criticism that the factory workers making its handbags were being grossly underpaid and responded by saying it could not control its contractors’ labor practices.

— The Spades Cash Out

Neiman Marcus, which was taken over by two private equity firms the year before, bought out the remainder of the Kate Spade brand. Neiman then promptly sold the full Kate Spade package for $124 million to Liz Claiborne, a clothier that had already acquired Juicy Couture and Lucky Brand Jeans. In 2007, the Spades left the brand, which by then was generating more than $80 million a year in revenue.

— Changing Names

Liz Claiborne, which sold much of its portfolio and changed its name in 2012 to Fifth & Pacific, rebranded itself as Kate Spade & Co. The company, long a target of counterfeiters, also developed a strong presence at outlet malls and department store discount shelves, raising concerns among analysts that it was devaluing its reputation.

— Another Sale, a New Venture

Coach, which has since become a holding company called Tapestry, agreed to buy Kate Spade & Co. for $2.4 billion. By this time, Kate Spade offshoots like Kate Spade Saturday and Jack Spade had been shut down. A year earlier, in 2016, the Spades and two partners quietly started a new company, Frances Valentine, selling handbags, footwear and accessories online and through retailers like Bloomingdale’s and Nordstrom.