Why Does Kate Spade Pform From Brand Diversification To Product Diversification?

Kate Spade, which is facing the risk of slow growth, has recently entered into new cooperation agreements with several companies, including women's clothing, children's wear and home furnishing, etc., to promote the company to become a global lifestyle brand through the comprehensive expansion of multiple categories of businesses.

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Before full expansion, Kate Spade is doing "subtraction" to cut off the sub line brand.

In the first half of this year, Kate Spade gradually shut down its 19 sub shops, Kate Spade Saturday, and the 12 men's shop of Jack Spade.

In the fourth quarter of last year, the net income of the two brands dropped to $126 million 500 thousand, compared with $185 million 200 thousand a year earlier.

But the e-commerce website of the brand will remain normal, and the product line will be merged into shops such as Kate Spade New York.

"The purpose of this move is to further speed up brand building, clear positioning and show to the public.

"The greatest potential," said Craig Leavitt, chief executive officer of Kate Spade.

Kate Spade Saturday is a low price sub line brand of Kate Spade, which is designed with ease and liveliness.

Below the main line brand 50%; Jack Spade is a 22 year old men's clothing brand under Kate Spade.

"Sub line brand can rely on the luxury brand aura of the main brand to maintain a higher profit margin, but if it mismanaged, it will face the risk of dilution of the entire brand value.

Therefore, more and more brands are beginning to rethink the significance of the brand collateral line, such as Marc Jacobs has announced the elimination of the sub line brand Marc by Marc Jacobs.

Zhou Ting, director of the research on wealth quality, told the first Financial Daily reporters.

Zhou Ting believes that "Kate Spade cut off the subordinate line after concentrating on a brand, and also wants to improve its performance. It has to consider the diversification of products and extend to the way of life.

In particular, we see the effects of Zara, UNIQLO, Muji and other fast fashion brands.

Last year Kate Spade had tasted the sweetness of cross-border licensing cooperation.

It has launched a series of holiday home gifts with high-end home furnishings brand Lenox, which has increased its sales volume by 20% over the same period last year. So it is ready to cooperate with the launch of a new series of kitchen accessories this year. The 116 items include cookware, tableware, cutlery, glassware and so on.