Since Liz Fraser assumed the role of chief executive officer and brand president of Kate Spade New York in March 2020, she has guided the $1.4 billion lifestyle brand through the pandemic, store closures and reopenings, a hybrid work schedule and new ways of working.
For the last fiscal year, the brand experienced a 22 percent increase to achieve record revenues.
“I remain definitely more excited about Kate Spade today than I was even when I started,” Fraser said in an interview at the brand’s Manhattan headquarters. “I think this is a remarkable brand with tremendous elasticity and yet is so clear what it is. That’s an unusual combination. So we can do a Kate Café, we can do a million things. It’s just picking what we want to do and when.”
Among some of the projects underway in 2023 are a new retail design concept for its freestanding stores; a collaboration with Pantone for Kate Spade Green; a partnership with Thred Up, and jewelry-only boutiques. She is also collaborating closely with her new design team, which she brought in in 2021.
And of course, there’s the move.
Kate Spade will be moving out of the company’s offices at 2 Park Avenue into 10 Hudson Yards, where its parent Tapestry is based, in a year and a half and will be redesigning the office set-up to accommodate the new ways of working.
“Redoing the office will be an interesting project to think about how do people want to work. It really gives us a chance to redo the office and design the office of the future,” said Fraser, who previously held leadership roles as president of Lafayette 148, CEO of Anne Klein, and president of Marc Jacobs, having cut her teeth at companies such as Esprit de Corp., Escada, Liz Claiborne inc. and Calvin Klein.
Kate Spade currently occupies two-and-a-half floors at 2 Park Avenue. “With the amount that we’re using, we really don’t need two-and-a-half floors,” she said. For example, rows of desks are no longer necessary. “Just trying to come up with communal work spaces is the idea,” she said.
Fraser shared that she had interviewed for a leadership role at Kate Spade multiple times. “This was like my fourth or fifth time. I’ve always been a huge Kate fan. I was the president of Marc by Marc, and there were a lot of similarities — strong culture, accessories orientation, color, fun, wit, but I could never get anybody to come from Kate over. Nobody ever wants to leave Kate Spade, and that’s still the case. The culture’s very, very strong,” she said.
Fraser herself gets high marks from the industry for her leadership skills.
According to Jaimee Marshall, managing director of Kirk Palmer Associates, the executive search firm, who didn’t place her in the Kate Spade role but has worked with her as a client, “Liz is really one of the special executives in our industry. She operates with transparency and high integrity and that is rare. She is strategic, disciplined, balanced, knowledgeable about the end-to-end process, brand-oriented and just a lovely person to work with.”
As Kate Spade celebrates its 30th birthday this year, Fraser said that milestone presents an opportunity to look back, but also to look forward. The pandemic gave the team the chance to dig deep into who Kate Spade is, who is their customer, what do they stand for and what are they known for.
Kate Spade accounted for 21.6 percent of Tapestry’s total net sales in fiscal 2022 of $6.7 billion, according to a 10-K filed last August.
“We are uber customer-oriented,” said Fraser, adding they know a lot about the customers’ likes and dislikes and also are “super emotionally connected” to her.
“Our customers are passionate and loyal brand fans. They know us, and they love us,” she said. In the U.S., the customer’s age ranges from low 30s to high 40s, but can stretch lower and higher.
For example, she believes the brand reaches a younger customer because Kate Spade is the number-one fashion brand in tech cases, and the number-nine tech case brand in North America, according to NPD.
Kate Spade has 400 stores worldwide, more than half of which are in the U.S. One of the biggest initiatives is a new design concept for the stores. “We call it Uptown, Downtown,” Fraser said. The company started the project about a year ago. “It’s a nod to our New York heritage. We play in the tension of the two,” she said.
Kate Spade unveiled the first store with the new concept in Singapore last October. “It’s kind of residential. It’s a mix of uptown and downtown ideas and feelings, it’s a little whimsical such as the Kate Spade green piano and it really pulls people in,” she said.
The Kate Spade store in Singapore has a piano that pulls people in.
The company has launched a new customer strategy, which it is calling “The Great Escape” because “shopping should transport you. It should be your best, most fun times,” Fraser said. “We think that the store concept really does evoke that.” For a hot climate, the brand uses rattan, and the wallpaper has palm trees. The Northern Hemisphere stores have different furniture and they are more upholstered. She said the store in Ginza, Japan, which is in a town house, is slated to have a design makeover and reopen in November.
“This is a really big move for us. It shows the brand’s personality. It’s whimsy, it’s fun, and shows the energy of the brand and it’s doing incredibly well everywhere that we opened up, bringing in all kinds of new customers,” she said.
The new design concept at the Singapore store.
Accessories account for 80 percent of the Kate Spade business and in the last fiscal year women’s handbags generated $819.5 million, up from $681.5 million in the prior year, according to the 10-K. One of the things the company is excited about is the lifestyle aspects of the Kate Spade brand. “We have such an opportunity in footwear, ready-to-wear, jewelry is already a pretty big business. This store concept really highlights the different store categories. Where the new concept is in place we are over-indexing on the lifestyle categories,” she said.
Another new initiative is launching a jewelry-only store in a central London transportation hub in June.
“Jewelry is a category that does play really young. We have a fantastic business in the U.K. with jewelry. It’s going to be a little jewel box store because it’s tiny.” It will be fashion jewelry, but they’re also launching fine jewelry.
“We know that we’re a celebration brand. We know that people come to us to mark those big moments in their life, it could be their first job. If I had a dollar for every time I meet someone who tells me their first bag was Kate Spade when they started working, or a diaper bag. We’re the number-one searched brand for bridal registry,” the CEO said.
“It already is a really good business, but if we really lean a little harder into fine [jewelry] we can be everybody’s high school or college graduation gift,” she continued. She said Kate Spade has been doing jewelry for 12 to 15 years and has a strong core business, but it can also do novelty.
The London unit is the prototype store, but the concept could easily be rolled out globally. “Every time I mention it, every landlord’s ears perk up. It’s different, and it’s always challenging what to do with these small spaces. It’s 450 square feet,” she said.
She said the company is also looking to open more Kate Spade full-line stores across the U.S. A shop just opened outside Chicago in Oakbrook Center in Oak Brook, Illinois, with the new design concept, and a store at the Royal Hawaiian Center in Honolulu, Hawaii, will open Friday. A few stores in China also are opening imminently.
Closer to headquarters, Kate Spade’s New York flagship at Rockefeller Center is ideal for the redesign, she said. “Soon it will be happening there,” Fraser noted. During the pandemic, the brand developed a local customer for that location, which has generally attracted tourists. In New York, Kate Spade also has stores on Broome Street in SoHo, Hudson Yards and the World Trade Center.
Another development is launching a program with Pantone to introduce Kate Spade Green. The brand had been planning to redo its packaging and wanted the packaging, which uses recycled materials, to be green. The tote bags that are given out with purchase “you’ll have forever,” and are meant to be reused. The packaging launches in February. The paper is also recyclable.
“Green is our heritage color. When the brand first started, all the designs were green. Green was an important color. As we were diving into our heritage and understanding our DNA, green just really popped out. We started working with Pantone to establish Kate Spade Green because we want it to be forever, and we want to dive into our green-ness, and they’re the people to do it with,” Fraser said.
It was an 18-month project and Kate Spade Green is expected to be an ongoing hue at Pantone.
At its fall presentation at The Whitney Museum on Feb. 10, Kate Spade will have a Green Room and there will be green taxis parked outside, which will ride around New York City for 10 days.
When Kate Spade herself originally started designing the line, she put the labels inside the bag and at the last minute she pulled it out and placed it on the outside of the bag. “That was a genius inspiration moment, and we’re bringing that back,” Fraser said. They are reissuing the original Sam bag this spring, a boxy handbag, for the brand’s 30th anniversary, which is made from recycled nylon. It comes in more than six colors, such as Kate Spade Green, pink cloud, watercolor blue, true white, pistachio cream and black, and new novelty designs with embellishments, such as beaded raffia, sequin gingham and pastel paillette sequins.
The Sam Icon is also offered in a range of sizes and silhouettes, such as a small tote, mini tote, shoulder bag, convertible crossbody, belt bag and backpack.
The reissued Sam bag in recycled nylon.
Kate Spade is also adding new labels across categories, including rtw. The woven label is black with white typography or, depending on the product, may be a white label and black logo to best match the design.
The company plans to introduce a capsule collection for Kate Spade Green for spring that spans rtw, shoes, jewelry, eyewear, home and handbags and ships in February. In future seasons Kate Spade Green will be infused into the collection in different ways.
Fraser said they’ve been able to use more recyclable materials not just in the Sam bag, but other styles as well and they’re using more biological leathers that are more sustainably done.
In February, Kate Spade will also begin a partnership with ThredUp where it will introduce “Pre-Loved,” a 360 resale program that will allow customers to shop secondhand products directly through Kate Spade’s website and resell apparel. The partnership is a one-year term with the option to renew. Kate Spade will start marketing the launch across channels on Monday. Customers can earn Kate Spade New York shopping credit for sending in gently worn items from eligible brands. To participate, customers can generate a prepaid shipping label from katespade.thredup.com, fill any shippable box or bag with women’s and kid’s items from any brand in their closet, and ship it to ThredUp for free. For items that sell on ThredUp, customers receive Kate Spade New York shopping credit that can be used both online and in-store.
She said the company’s efforts in mental health, well-being and yoga have been happening for awhile, and people are even more passionate about it. The brand has a goal of touching 100,000 women by 2025 with direct mental health help. It is already at 66,000 women to date.
Kate Spade also started a Social Impact Council with about a dozen women who are experts in the field and they participated in the most recent U.N. General Assembly.
When questioned on whether there’s any stigma to the brand since its founder died of suicide in June 2018, Fraser said, “I think the world is changing. One of the things we’re very committed to is this topic because we think it should be de-stigmatized. I’m really proud of this number. We are the number-one funder of women’s mental initiatives in the world. We gave $3 million last year between ourselves and our foundation. There should be a lot more being done.”
Even before Spade’s death, they were involved in mental health initiatives, she said. “With her passing, it really galvanized people even more.” Although Spade wasn’t there physically and had sold the company years before her death, Fraser said, “She’s an icon in the industry, she’s an icon for our customers, she’s an icon for our employees. She was an incredible person with an amazing vision. What she did was innovative.”
Kate Spade is also working with Harlem’s Fashion Row and students from Bowie State University, Maryland’s oldest HBCU (historically black colleges and universities), are given access to engage with Kate Spade New York’s team of executive leaders and designers. The students are learning about all aspects of the accessories business and are currently in the second semester.
When Fraser first came to the company she thought about its origin story, and that it was a collaboration between Kate and Andy Spade. “We are a brand of storytellers. How we pull that story through product, visual merchandising, to digital, to how it feels in the store, is really hard to do. My thinking was to create a creative collaboration.”
In April 2021, Fraser hired Jennifer Lyu and Tom Mora as the two heads of design. Mora is currently senior vice president and head of design for rtw and lifestyle categories, while Lyu is senior vice president, head of design for leather goods and accessories. They succeeded Nicola Glass, who was creative director.
Their first collection was for fall 2022, and Fraser said she sees a noticeable change. “The level of cohesion and the clarity of the storytelling is remarkable. I love how we see through the showrooms and windows and how it can look in the stores,” she said.
While 80 percent of the business is in accessories, the remaining 20 percent is rtw and footwear, as well as 20 licensed categories such as tableware, housewares, fashion bedding, tech accessories, watches, sleepwear, eyewear, stationery and fragrances.
Handbags on display at Kate Spade.
The company stepped back a bit from rtw and pulled it out of some stores to work on the fit, quality and pricing. “It’s been back in since Tom started, and ready-to-wear is selling really well,” Fraser said. Outerwear and dresses are their two biggest rtw categories, she noted. She added the brand is well-known for occasion and going out clothes. At its Feb. 10 fashion show at the Whitney Museum, 15 looks will be shown in a presentation.
Last year, Kate Spade did the Year of Celebrations, and this year is The Year of Adventure. “The concept of the fall collection is an afternoon at the museum. It’s very bold colors and strong graphics. We have a collaboration with [the late] Alexander Girard. You’ll see ready-to-wear, footwear, handbags….Tom’s sense of color and styling is really special,” Fraser said.
Mora spent 14 years at J.Crew, rising to senior vice president of women’s design and was Jenna Lyons’ right hand. He left in 2015 and became creative director women’s and licensed products at Cole Haan.
Lyu’s background includes roles as vice president of handbags and small leather goods at Tory Burch, vice president of accessories and footwear at 3.1 Phillip Lim, and senior designer of women’s accessories at Prada.
Fraser said the brand is looking to go a little bit younger and more casual and is working on sweatshirts and sweatpants. “It’s coming, it’s not in this collection,” she said.
Another bright spot at the company is the online business, which Fraser said did “amazing” during the pandemic, as it did with many brands. “Kate has been a frontrunner in digital penetration for years. That’s because the brand does have a strong, young customer base and early adopters who are shopping online,” she said. Online has stayed strong “but in the last six months we’ve seen customers returning to stores in droves.”
Kate Spade does 80 percent of its business in North America. Of the remaining 20 percent, she said, they have a strong business in Japan, “a burgeoning business in Southeast Asia,” and “Greater China is an area that we’re very focused on as well.”
On a global basis, one-third of sales are digital, 57 percent are derived from their own retail stores and 10 percent are from wholesale.
Their wholesale business in North America, which Fraser said is a small part of the business, is done through stores such as Nordstrom, Macy’s, Bloomingdale’s and Saks Fifth Avenue. “I’m really happy with some of it. The pandemic has made it hard to recover,” she said. “Our primary focus is d-to-c. We love d-to-c is because we want to know our customer and d-to-c is the best way to do that.
She said Macy’s Herald Square just opened a shop-in-shop for Kate Spade handbags on the first floor, and a shoe shop-in-shop on the second floor.
Asked which handbag brands she considers Kate Spade’s biggest competition, she cited Michael Kors, Tory Burch, Marc Jacobs and Coach.
Right now there are stores in the U.K., including Scotland and Ireland, and they just started opening stores in Germany. “We think Europe has a lot of potential for us. We have high brand awareness given that we don’t have that many stores,” she said. In the first half of 2023, the company expects that 12 stores will either open or undergo a renovation to align with the new store design concept.
For the first quarter ended Oct. 1, Kate Spade sales increased 10 percent overall to $322 million, with a 7 percent increase in North America and 23 percent growth in international markets. Handbags, especially the Knott collection and the Katy, “outperformed expectations” along with new shapes such as the Boxxy — which was particularly popular with younger customers, and the Lady Leopard Tote, which retails for more than $400, as reported.
Situated in the accessible luxury range, Kate Spade’s handbags range from $200 for small crossbodies to more than $500 for elevated pieces. The sweet spot is between $300 and $350, she said.
When Fraser assumed the CEO role, she made a few changes, but didn’t shake up the place. “I think it’s really important to have a mix. You always want to have a dynamic organization. Part of that dynamism has to be people who are rooted in the heritage as well as new ideas and new people,” she said.
Fraser brought in Jenny Campbell, chief marketing officer, in November 2020, who came from Tinder and before that was at Nike. “She has this sense of how to build community digitally, which I thought was really interesting and what I thought would be really powerful for Kate, because Kate is a community brand,” she said.
“We want to create a passionate group of highly engaged customers who are engaged with us and engaged with each other. That’s our perfect nirvana,” she said.
