Kate Spade New York continues international expansionWednesday, 13 June 2012
The move is part of a robust international expansion, which includes recent store openings in the UK, Dubai, and Kuwait as well as further expansion into Brazil with additional store openings in Rio de Janeiro and Sao Paulo planned for this summer.
The company plans to close the deal this autumn and is expected to pay $45 to $50 for the stake, which includes debt repayment and related transaction fees. The deal is part of Kate Spade’s strategy to partially own the majority of its Asia-based businesses and the Japanese business is important as it represents the company’s second largest market outside of the US.
In May last year, Kate Spade New York announced a joint venture in China with the E.land group, with plans to grow to nearly 300 points of distribution by 2020. At that time, it also announced its plans to buy back the Hong Kong South East Asia business from its long term distribution partner in January 2014.
The brand has been in Japan for the past 15 years and has experienced robust growth and increased brand awareness since operations in the joint venture in 2009. The brand currently operates 52 points of sale and expects to expand point of sale growth over the next few years. For the fiscal year ended August 31, 2011, Kate Spade Japan's net sales were approximately $71 million and over the last twelve months ending April 2012, net sales had grown approximately 20 per cent.
Craig Leavitt, CEO of Kate Spade New York said: "Kate Spade New York has a long and successful history in the Asian market. We believe the brand has a unique ability to continue to grow internationally and be relevant to consumers around the world.
“In order to realize our international potential, we believe partially or wholly owned business models better enable us to connect more directly to our consumers, understanding and investing in their preferences and tastes more keenly. It is our strategy to build a global company to support what is already quickly becoming a global brand."
Image: Kate Spade New York Spring 2012 campaign