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Looking to the Past to Predict the Future for the Kate Spade Brand

The recent suicide of Kate Spade, who is scheduled to be laid to rest Thursday in her hometown of Kansas City, Missouri, has raised questions about the risks and rewards of building a global brand around a namesake designer. After selling her company more than a decade ago, Spade remained the face of a label she no longer had artistic input in.

However, on the day news of her death broke, sales of Kate Spade items spiked 600 percent, according to The Wall Street Journal, and all new arrivals from Spade’s recently established accessories brand, Frances Valentine, sold out. But in the first quarter of 2018, same-store sales of Kate Spade had plunged 9 percent, according to CNNMoney, causing shares of parent company, Tapestry, to drop.

“Brands survive, and often flourish after the namesake founder is gone,” Dana Della Valle, founder and president of DDV Group, which advises private equity firms on fashion acquisitions, said. “I believe once a brand hits $100 million in annual revenue, the brand no longer necessarily even belongs to the designer/founder. The loss of a designer, or controversies surrounding them, can be extinguished pretty quickly, with great marketing and PR to lead the narrative down a positive path. The brand takes on a new life of its own, belonging to the customer/public now. Martin Margiela, Helmut Lang, Jil Sander, and sadly even Kate Spade, have done better financially after the designers left their eponymous fashion brands.”

One case with notable similarities to Kate Spade is Alexander McQueen. After the designer’s 2010 suicide, the house, owned by Kering, replaced the runway show with a quiet presentation of the designer’s incomplete collection, and after a four-month mourning period named McQueen’s long-time assistant Sarah Burton as his successor. The following year she burnished the brand’s global recognition by designing Kate Middleton’s iconic wedding dress. Kering does not specify sales profits for McQueen, but revealed that Q1 2018 growth was “highly positive across all regions.”

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“I think a campaign supporting mental health and suicide prevention would be a positive way to preserve and embrace Kate Spade’s legacy as an inspiration to women,” says Mary Gallagher, European associate at Martens & Heads executive consultancy.

And that’s exactly what the Kate Spade brand did. On Wednesday, the company announced that in honor of its namesake founder, its foundation will donate more than $1 million to suicide prevention and mental health awareness causes, and will also match public donations to the Crisis Text Line from June 20 through June 29 up to $100,000. The Instagram post announcing the donation garnered more than 195,000 likes in one day, more than four times the likes on the post just before it.

Gallagher compares the Kate Spade tragedy with the saga of John Galliano, who was one of the first highly public fashion figures whose psychological struggles threatened the brand he was the face of, Christian Dior. After Galliano was fired in 2012 for drunken, anti-Semitic remarks, Dior rebounded by steering the house away from Galliano’s signature theatrical style while the designer’s discreet efforts of rehab and atonement were largely viewed as authentic personal growth, if not redemption. In 2014, he became creative director of Maison Margiela.

The Guardian named 2017 “the year of Versace” 20 years after Gianni Versace’s murder forced sister Donatella to assume control of the business, the pressure of which contributed to her subsequent struggle with addiction and recovery. Today the brand is a Milan Fashion Week must-see, and Versace herself has become a beloved pop-culture figure—resilient and glamorous, yet relatable.

To err is human, to forgive divine, they say, and relatability resonates in this era of transparency, partnering easily with accountability. Shoemaker Steve Madden posted Q1 2018 sales of $389 million, well above Wall Street expectations, despite the founder’s checkered past. Madden, a university dropout who began by selling shoes out of the trunk of his car, pled guilty to securities fraud in 2002. After serving 31 months in prison, and getting sober, he returned to his company, made some strategic acquisitions and partnerships, dove into charity work, and business has been booming ever since.

Meanwhile, the halo effect around Stella McCartney, who just opened a new London flagship and bought back her brand from Kering, shines bright. Battling early criticism that her famous surname was responsible for her ascent, she carved out a leadership position creating exclusively non-leather accessories, prioritizing fair-trade, sustainable, ecological processes, and collaborating with PETA, tying herself to her less-famous vegan mother as much as her musician father.

Conversely, the value of Marchesa—worn by actresses on the 2016 red carpet more than any other designer, according to Vogueplummeted amid abuse allegations against Harvey Weinstein, husband of co-founder Georgina Chapman. Her insistence that she suspected nothing during their decade-long marriage rings hollow in the #MeToo #TimesUp environment, and the brand canceled its fall 2018 runway show and provided no gowns for awards season.

Family ties have also led to slipping sales at Ivanka Trump. Her father’s policies affecting women and her silence around them appear to contradict the brand image of a powerful, independent woman. Her collection was dropped by Nordstrom and Neiman Marcus amid the #grabyourwallet boycott.

Scott French, VP at The Bromley Group, believes a namesake’s death needn’t ring the death knell for a company.

“In today’s world, a designer name has so many touch points with the consuming public. With Kate Spade, it can actually bring some context to the cause that took her from her family, friends and adoring public. The brand can, as a result, be given an opportunity to do more good by sharing the spotlight with the cause it is now attached, whether it likes it or not.”

So, if storytelling is brand-building, then the Kate Spade brand needn’t have a sad ending. Strategies that address the circumstances of the namesake’s death head-on can ensure that both the brand and the legacy behind it live on.