Kate Spade New York is dead set on its quest for world domination.
The quirky lifestyle label on Tuesday announced plans to expand into India through a long-term distribution and retail license agreement with Reliance Brands Limited, a subsidiary of Reliance Industries Group.
Under the terms of the deal, Reliance will have the exclusive distribution rights to the Kate Spade New York brand in the country and a network of standalone stores will start opening later this year in major cities, including New Delhi and Mumbai.
“With India’s increasingly aspirational consumers, we see significant opportunities to build brand equity,” Craig Leavitt, chief executive officer of Kate Spade & Company, told analysts during a conference call discussing fourth-quarter and full-year earnings results. “And although we think this is a modest, short-term opportunity in region, we believe building engagement with the Indian consumer will impact business in markets such as Europe and the Middle East as we grow.”
Darshan Mehta, president and CEO of Reliance Brands Limited, shared in a statement, “We are confident that Kate Spade New York’s strong heritage and strong design point of view will resonate with Indian consumers, bringing a new dimension to the women’s wardrobe.”
The brand’s expansion into India is the latest stop on its journey into new markets around the globe. It extended its reach to an additional eight markets in 2015, opening 44 new stores on a pro-forma basis. Kate Spade International net sales for the fourth quarter rose 18.7% to $51 million from $43 million, “excluding sales for wind-down operations,” and the company said comparable store sales continued to accelerate in Japan, while a joint venture agreement in China has strengthened its brand position there.
Overall, Kate Spade delivered a mixed bag of results on Tuesday, missing earnings estimates but posting a net sales increase of 7.6% to $429 million on a reported basis for the quarter and 9.1% for the full year to $1.24 billion. Adjusted diluted earnings per share were $0.32 for Q4 and $0.50 for fiscal 2015. Gross profit as a percentage of net sales was 60.2% on a reported basis for the three months ended Jan. 2.
George Carrara, president and chief operating officer of Kate Spade & Company, said, “We are very pleased with our full-year performance for 2015, particularly our industry leading comparable sales growth of 13 percent and robust adjusted EBITDA margin expansion of 380 basis points, positioning us well to achieve our adjusted EBITDA margin target of 18-20 percent in 2016.”
“Our quality of sale efforts are successfully fueling brand aspiration and our channel-agnostic approach was a key driver of growth both during the fourth quarter and throughout 2015. We will continue to prioritize these important points of differentiation in 2016,” Leavitt added.