With its colorful designs and bold patterns, Kate Spade New York prides itself on adding a playful touch to women's fashion.
In this 82nd instalment in a series on the world's high-end brands, Kate Spade New York Chief Executive Officer Craig Leavitt explained what sets his company apart and the importance of the Japanese market.
Leavitt was born in New York in 1960, and became CEO in 2008.
The Yomiuri Shimbun: What are Kate Spade's strengths?
Craig Leavitt: We started out as a handbag brand, but one of our key competitive advantages is that we have really developed into a global lifestyle brand. We have added important categories like apparel, jewelry, watches and fragrances...and shoes. This entire lifestyle of categories has really helped us more fully engage [our customers] with the brand.
Q: Are you expanding overseas?
A: We'll be opening our first store in continental Europe in Paris this year. We're also launching in Mexico to expand into central America later this year. Our global sales were over US$460 million in 2012. We expect to end 2013 between US$700 million and US$750 million. On a comparable like-for-like basis, we saw a 30 per cent growth in 2012. We launched apparel four years ago, and over the long term we expect that to be about 30 per cent of our business, and we are trending well toward achieving that goal globally.
Q: Is Japan's market unique?
A: Japan continues to be a great market, and we've been here for 17 years. Sales in Japan account for a little less than 30 per cent of Kate Spade's total sales. We still see meaningful opportunity for expansion. In Japan, our customer is confident in her style and likes to present herself with bold colour and be the life of the party. In the spring, we'll open a global flagship here in Tokyo in the Ginza area. We're very excited about that.
Q: How do you appeal to Japanese customers?
A: Japan is the first place that we've done a special fit, because our business is so important and has grown so large here. We knew there was a specific need in the marketplace. We love the customers in Japan because they are very engaged with the brand, they are very fashion-savvy, and they make the product their own. We don't necessarily expect that a customer is going to come in and buy a whole look off a mannequin, but they are able to put together looks for themselves and are confident in the way they present themselves.
Q: You launched the "Saturday" line this year. It's sold online in the United States but in stores in Japan. Why did you take this strategy?
A: We opened our flagship for Kate Spade Saturday in Harajuku in Tokyo in March. We've done both in Japan, we launched online and bricks and mortar. The online component of this brand is particularly important because the younger consumer does a lot more of her shopping online. We present Kate Spade New York and Kate Spade Saturday as lifestyle brands, so it's a very balanced approach in terms of the product categories between apparel, accessories and home products. Bold colors and pattern are shared between the brands, but the Kate Spade Saturday girl is definitely younger, our core is about 25 to 35. It's more a core of 30 to 40 for Kate Spade New York.
Q: Are there any secrets to success in e-commerce?
A: More than 20 per cent of our sales globally are generated by our e-commerce business. Our websites are very balanced in terms of engaging the customer with information about our brand, there's our blog telling her what's exciting and new with the brand, as well as conducting e-commerce.
Q: What are your guiding principles as a CEO?
A: We have many fresh ideas and new things that we want to explore, so staying focused and having the discipline to prioritize the key strategies and things we want to accomplish as we grow are extremely important. There are more categories of product that will be coming along over the next year or so, and we'll continue to expand into new markets globally.