Here's why Kate Spade didn't profit when her brand sold to Coach for $2.4 billion
- Kate Spade was found dead in an apparent suicide in her apartment in New York on Tuesday, according to multiple reports. She was 55 and leaves behind her husband, Andy, and a 13-year-old daughter, Frances Beatrix.
- Spade launched her namesake handbag business in 1993 and worked with her husband to grow it into a million-dollar business before it was sold to Neiman Marcus in 2006.
- In 2017, the business was then acquired by Coach for $2.4 billion. At the time, the Spade family had no involvement in the company.
The news of Kate Spade's apparent suicide on Tuesday morning sent shockwaves around the world. Hundreds of fans posted photos of themselves with Kate Spade handbags in tribute of her tragic death. Others even went to the Kate Spade stores to buy handbags in support.
However, neither Spade nor her husband Andy, who helped set up the brand in 1993 and later joined the business full-time, have had a role in the business that they created since 2007.
The story of Kate Spade
The couple built up the business from their loft in Tribeca.
"We had so many boxes in our 1,800-square-foot loft during shipping time that we had a path from the bedroom to the bathroom," Andy told CNN Money. "It was hot. We had no air conditioning, and it was August. We had put everything into this. I put in my 401(k) money ... We didn't know for sure that the business was going to work."
In the late 1990's, the brand was considered to be an exclusive label. Sales jumped to $1.5 million in 1995 from $100,000 in 1993, then to $27 million in 1998, according to Racked.
In 1999, the Spade's sold a 56% stake of the company to Neiman Marcus for $33.6 million. Years later, in 2006, they sold the remaining stake to Neiman's for $59 million. In 2007, the Spade family relinquished all involvement in the business.
Just one week after buying the company, Neiman sold it to apparel giant Liz Claiborne for around $124 million. At the time, Liz Claiborne, which later became Fifth & Pacific, stocked more than 40 different brands and generated more than $5 billion in annual sales. However, its handbags and accessories business was limited.
Fifth & Pacific went on to sell off its other brands and renamed itself Kate Spade & Co. The brand was bought by Coach (now Tapestry) for $2.4 billion in 2017. The Spades did not benefit from this sale.
After a brief hiatus from fashion, Kate Spade launched a new handbag-and-shoe company, Frances Valentine, in 2015. She also changed her name to Kate Valentine to match the new brand and distance herself from her previous business.
Remembering Kate Spade:
- 'You don't know me but I know you': After Kate Spade's death, people are sharing how the designer touched their lives through fashion
- Kate Spade has died in an apparent suicide at 55. Here's the story behind the rise of her handbag empire.
- Kate Spade shared how she wanted to be remembered in a 2002 interview
- Kate Spade was totally detached from her namesake brand
- Kate Spade leaves behind her husband and business partner. Here's what we know about their relationship.
- Kate Spade's fans are reacting to her apparent suicide with reminders about mental health
- Celebrities and fashion industry figures are reacting to Kate Spade's apparent suicide