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Kate Spade fully cashed out of her eponymous fashion label in 2006. The company is slated to be sold... [+]
Luxury retailer Kate Spade is set to be acquired for $2.4 billion, and the woman for whom the brand is named won’t see a dollar of it.
On Monday, news broke that fashion company Coach would purchase Kate Spade for $18.50 per share, or $2.4 billion. The announcement sent Kate Spade shares up 8% through 3 P.M. EST, while shares of Coach climbed nearly 5%.
The company’s original founders, including Kate Spade and her husband, Andy Spade, cashed out of the business more than a decade ago. As a result, they will not receive anything from the proposed sale.
Reached through a representative, Ms. Spade declined to offer comment.
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Spade, a former accessories editor at Mademoiselle magazine, launched her eponymous brand with her future husband, Andy, an advertising executive, in 1993. By 1998, annual revenues had reached $27 million.
In 1999, they sold a 56% stake to Neiman Marcus for $34 million. Then, in 2006, Spade and her two partners sold the remaining 44% to Neiman for a reported $59 million. Assuming the Spades split their share with partners, they would have walked away with $46.5 million before taxes.
A week after the second half of its acquisition, Neiman Marcus inked a deal to offload the entire Kate Spade company to fashion retailer Liz Claiborne for a reported $124 million, including debt. Liz Claiborne, which once held more than 40 subsidiary brands, subsequently changed its name to Fifth & Pacific in 2012, before rebranding again as Kate Spade & Co. two years later.
Ms. Spade, having missed out on the most lucrative portion of her company’s history, is seeking to start anew with another brand, Frances Valentine, which she launched in 2016. Whether she can build, and hold on to, a fashion unicorn of her own remains to be seen.
Company representatives declined to comment on Frances Valentine’s current financial figures.
