How Kate Spade created a $2.4billion fashion empire but lost out on billions by cashing out early

At the time of her shock death on Tuesday, Kate Spade was trying to launch her second fashion venture after cashing out of her eponymous brand early and missing out on pocketing billions of dollars with her husband. 

The designer, who was found dead in her Park Avenue apartment aged 55 after apparently hanging herself, launched her company in 1993 with her husband Andrew. 

They were not married at the time and she went by her maiden name Brosnahan but the pair wanted to brand to serve as a combination of her first name and his last. 

In 1994, they married and thus she became Kate Spade, formally taking on the same name as her one-year-old company. 

Kate, who had worked in the magazine industry as accessories editor for Mademoiselle in the late 80s, saw a gap in the market and throughout the 90s, her bold, colorful designs and whimsical prints became a solid hit among New York City’s glitterati. 

Thanks to the brand’s popularity among celebrities like Gwyneth Paltrow, its sales grew and in 1998, revenues reached $27million. 

Kate Spade is pictured at an event with her handbags in 1998. At the time, her company was just five years old and was worth $27million 

Kate and Andy Spade are pictured in 2000 at the height of their success as the founders and owners of their eponymous company. In 1999, they sold 56% of their shares to Neiman Marcus for $34million. Eight years later, they sold the remaining 44% for $59 million. Its value soared afterwards to $2.4billion 

Kate and Andy Spade are pictured in 2000 at the height of their success as the founders and owners of their eponymous company. In 1999, they sold 56% of their shares to Neiman Marcus for $34million. Eight years later, they sold the remaining 44% for $59 million. Its value soared afterwards to $2.4billion 

Confident about its future but keen to work on other ventures, Kate and her husband, along with their founding partner Elyce Arons, sold 56% of their shares to Neiman Marcus for $34million in 1999. 

They retained 44% for the next seven years until they finally cashed out in 2007 to raise their daughter.  They sold their remaining shares for $59million. 

Barely a month later, Neiman Marcus offloaded the company as a whole, with its debt, to Liz Claiborne Inc for the sum of $124million. 

Liz Claiborne held on to it until last year and put all its energy into building it into a blockbuster brand for the aspirational shopper on a budget. 

As the brand’s handbags became increasingly ubiquitous, it piqued the interest of Tapestry, the parent company of Coach and Stuart Weitzman. 

Spade and her husband Andrew in April 2017. The pair spent the last few years launching Frances Valentine, another accessories line. Andrew had other ventures including a luxury loungewear company 

Spade and her husband Andrew in April 2017. The pair spent the last few years launching Frances Valentine, another accessories line. Andrew had other ventures including a luxury loungewear company 

Last year, Tapestry bought Kate Spade & Co, the name Liz Claiborne gave it, for an astonishing $2.4billion – 20 times the value the company held when its founders sold their shares. 

Between 2007 and 2016, Spade and her husband focused on raising their daughter and he launched Partners & Spade. 

It began as an experimental, studio-focused company but now counts trendy, NYC brands including glasses retailer Warby and Parker among clients it provides marketing for. 

As the Coach deal was worked on last year, Kate focused on her new brand – Frances Valentine. 

To boost the company’s sales and to establish a legal separation from her old, billion-dollar company, she changed her name officially from Kate Spade to Kate Valentine Spade.  

She gave no hint that she was sour about missing out on the hundreds of millions of dollars made in the years after she parted ways with the company. 

In an interview last year, she said she would not have traded the time spent with her daughter during that time ‘for a million years’.   

Modern fan: The Duchess of Cambridge is pictured in a Kate Spade dress in 2016, nine years after its founder cashed out. The new owners retained Spade's whimsical style and flare for color which made her a hit among New York celebrities in the 1990s 

Modern fan: The Duchess of Cambridge is pictured in a Kate Spade dress in 2016, nine years after its founder cashed out. The new owners retained Spade’s whimsical style and flare for color which made her a hit among New York celebrities in the 1990s 

The financial success of Frances Valentine, meanwhile, remains a mystery due to the fact that it is privately owned and does not disclose its financials. 

Last year, the designed spoke proudly of the fact that they didn’t borrow a ‘dime’  to launch it. 

Despite receiving rave reviews from loyal fashion magazines which celebrated her while she was at the helm of Kate Spade the company, Frances Valentine failed to make the same impact in stores. 

It has no standalone New York City store but sells its items online on its own website and is stocked in Bloomingdales, Saks and Nordstroms. 

Their current season items area around the same price as Kate Spade New York. 

The day before her death was announced, Spade’s fashion industry comrades gathered in Brooklyn for the The Council of Fashion Designers of America awards. 

Spade, who is a member of the Council, did not attend.

On Tuesday, it released a statement mourning her death. 

‘The CFDA is devastated to hear the news of our friend, colleague, and CFDA member Kate Spade’s tragic passing.

‘She was a great talent who had an immeasurable impact on American fashion and the way the world viewed American accessories.

‘We want to honor her life and her major contribution to the fashion business and express our most sincere condolences to the family,’ Diane von Furstenberg and Steven Kolb said. 

Kate Spade, the company, gave the following statement. 

‘Kate has not been affiliated with the brand for more than a decade, she and her husband and creative partner, Andy, were the founders of our beloved brand. Kate will be dearly missed.

‘Our thoughts are with Andy and the entire Spade family at this time.’ 



Read more at DailyMail.co.uk