Coach just bought kate spade – but don’t freak out, read this instead.
As some of you may know, I had a career working in corporate fashion before Color Me Courtney became my full-time gig. My latest role was producing handbags in product development at Coach. Before that I had various roles working merchandising, production, store operations and on a retail level at a variety of brands – including kate spade. As a result, I now have a unique insight into the industry and specifically on this current situation that I wanted to share – hope you enjoy!
Oh and before I go any further, I wanted to say that I am not speaking as a representative for kate spade or Coach, I’m just sharing my opinions based on research, experience and observation.
Breaking News – If you keep up the fashion side of the business world, you probably heard that Coach bought kate spade yesterday for 2.4 billion dollars! If you’re a tried and true ksny fan, you might be upset. Learning that your favorite brand has been bought is a scary thing, you might feel betrayed, unsure of the future or terrified that your go-to shop just disappeared. I’ll be honest, my first reaction was surprise with a bit of panic, so if you felt this way you’re not alone!
It’s no secret that kate spade is one of my favorite brands, I wear their stuff all the time – where you hardly ever see me wearing Coach. I respect both brands immensely, it’s just one is more my style than the other.
Before I tell you why you should not stress over this purchase, I’ll give you a little background on kate spade.
SHOP KATE SPADE
for under $100
The History of kate spade – SO ksny was founded by you guessed it, Kate (Noel Frances Valentine Brosnahan) Spade in 1993 – yep thats her full name. She who set out to design “the perfect handbag”. Since I was 3 at the time, my first memories of kate spade came in middle school, when I remember my mom wanting a bag and later in high school when Charlotte complains of not being able to fit a tampon in her kate spade purse on Sex and the City.
In 1996 the first store opened, and later Neiman Marcus Group purchased 56% of the Kate Spade brand in 1999, they would go on to acquired the remaining 44% in 2006. So before you get scared that kate spade wont be the same without the actual Kate Spade, know that that ship sailed long ago and the brand you know and love know isn’t necessarily run by someone named Kate.
In 2006, Neiman Marcus sold the brand to Liz Claiborne Inc for $124 million, and it was later renamed to Fifth & Pacific. At the time they owned Juicy Couture, Lucky Brand Jeans and Jack Spade as well. This is where I found and fell in love with the brand – I would stalk kate spade online from my Arizona bedroom, and all of our NYC (and San Fran trips) were surrounded around visiting a store (or two).
In 2007, Deborah Lloyd (previously at Banana Republic and Burberry) became president and chief creative officer of kate spade, bringing an added sense of fearless sophistication. Deborah, and later CEO Craig Leavitt (2014), launched clothing and jewelry collections, quickly followed by the introduction of bedding, legwear and fragrance. This more closely resembles the Kate Spade you now know and love … and once again, the creator Kate Spade wasn’t driving the ship.
I started working for Kate Spade at the store level around 2012 while I was in grad school getting my MBA, in a charming San Francisco store. There I made life long friends, including my current bestie Emily who started working for the brand almost 4 years earlier. She really saw the introduction of clothing and early growth of the brand, and had clothes form some of the original collection – since we were both OBSESSED she shared all of these stories with me.
Around this time (2007-2014) the ksny you’re now obsessed with started to take off – and this kate spade was really Deborah’s vision. Deborah Lloyd has a really impressive resume in the fashion space, she’s done some incredible things for brands along the way, but I think she found her home at kate spade. Having met Deborah three times, and low-key cyber stalking her during my ksny days – I can share that she’s poised, graceful, feminine, chic and strong – all things that I see in the evolved kate spade today. Kate herself, however is a little quirky, curious and fun – also great qualities I see in the brand. Deborah really did a fantastic job of taking that whimsical heritage, staying true to Kate and driving the brand into the future to become what we see now.
SHOP CUTE KATE SHOES
Let’s talk about Coach – So although kate spade is a brand that truly will always have my heart, Coach has a piece of it because of our history together. I had the pleasure of working at Coach during a brand transformation, something I’m really very thankful for.
Brand Transformation – A few years back, Coach really pivoted, changing its product structure, target market, price point, value and total brand identity. It was a really challenging and unique time in the organizations history, and SO COOL that I got to be at the center of it – developing handbags that would ultimately help shift this organizations perception.
Aside from evolving Coach’s own brand, they company never wants to find itself in the financial lull that it did a few years back – so part of thier new brand strategy is to diversify their portfolio. This is crazy smart! No fashion brand is going to be on top all the time, even epic houses like Prada and Gucci go through peaks and valleys (Gucci is totally having a peak right now) – but these brands can survive for a variety of reasons – with diversification being one of the driving factors.
Take LVMH, which owns Celine, Fendi, Louis Vuitton, Givenchy and more along with houses outside of the fashion sector. So Celine has a lull, maybe Givenchy is hot resulting in an equilibrium balance – smart right. Coach is aiming to create something similar as they become a global powerhouse in that affordable luxury and luxury market. To achieve this, step one was to rebrand Coach and step two was to grow and expand.
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In 2015 Coach paid $574 million to purchase Stuart Weitzman, at the time I was still working in product development at Coach so I became very interested in the change. We all wondered how would this affect us at a corporate level, and the answer is it kind of didn’t. We got a Stuart Weitzman employee (yay) and kept our jobs. At the time, we were told that this acquisition would be mutually beneficial, resulting in shared core copentenczies (Coach was outsourcing our shoes, and with SW we could potentially move to make them in house, while SW was struggling in the handbag department that Coach excels in) but companies would be kept seperate. And this rang to be true, the biggest change we saw in house on my level is two higher ups moved over to Stuart Weiztman time including one of the handbag designers resulting in a slight reorganization of teams that kind of had something to do with me me – but to be honest, we reorganized so much internally as a result of our ever changing brand transformation, so this was nothing new at Coach.
I’ve since left Coach, but watched both brands from afar to see if this has continued to be true, and it has – both brands operate as diverse organizations with supplemental income streams. Most importantly Stuart Weitzman hasn’t changed much at all.
So what does this mean for kate spade? – I’m not sure if the plan for kate spade is different than the Stuart Weitzman one, since I left over a year ago to blog full time but Coach has stated that intend for kate spade to maintain their brand identity.
I will share this, when I worked at Coach although we would review sales numbers of Kate Spade, the merchandizing teams would continually claim that kate spade wasn’t a competitor – they didn’t see them that way because they believe they have different customers. And hey, I see that – I shop at kate spade monthly and love 90% of the things the make, I shop at Coach maybe quarterly and love 10% of the things the make. Most bloggers and celebrities that Coach hires don’t wear any ksny, and vise versa – and thats okay, they’re different brands.
So many people think brands merge when they’re bought and that is usually never the case. If I had to guess, ksny will continue to operate as a seperate organization, with some shared competencies. Having worked for both brands, I can share that they both operate differently with similar yet unique structures – and I don’t see any reason for them to merge.
One Change we might see has to do with focus. Coach is a deeply rooted leather house founded in 1941 with some of the highest quality standards in the industry. Although kate spade also excels at creating leather products, they were founded as a nylon brand in the 90’s and therefore have a different history and understanding. As a result, if anything we might see a slight increase or change in leather standards at kate spade, but I doubt the aesthetic will change much.
So if you feel like you lost your best friend in kate spade, don’t stress – she’s not going anywhere I firmly believe this brand (and the magic associated wit it) is here to stay.
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S/o to my friend Brittani Hon, she posted that she was sad about this purchase on Facebook, and ultimately inspired this post.