Kate Spade: Once Queen of Our Hearts, Has Lost Its Way
By: Yvonne Wu
The Ivey Business Review is a student publication conceived, designed and managed by Honors Business Administration students at the Ivey Business School.
Embodying bright colours and memorable patterns, Kate Spade used to be synonymous with New York, making multiple appearances on prime television and celebrity arms. Built on colourful, clever design and lifestyle storytelling that resonated deeply with women in the 90s, the brand has since struggled to articulate a coherent point of view. The result is a label that carries name recognition, yet rarely earns the loyalty or top-of-mind interest required to compete in the highly dynamic “accessible luxury” category.
Kate Spade: The Rise and Fall of The House of Cards
Founded by designer Kate Spade in 1993, the brand quickly became an American fashion house, known best for its colourful and playful handbag designs and other accessible lifestyle products like clothes, shoes, and jewelry. The brand primarily targets female customers aged 20-40 years old who are interested in fashion, but also value quality materials and durability in her purchases. As a brand, its identity was strongly tied to the, now outdated, quirky aesthetics of the 2010s.
The period following the passing of its founder introduced instability, including leadership turnover across creative and administrative functions. Today, in its most recent change in leadership, Eva Erdmann was appointed as CEO and Brand President, in early Q4 2024. This transition signalled overall recognition by upper management of a brand in need of sharper direction.
Tapestry: The Fabric Behind Kate Spade
Tapestry (NYSE: TPR), previously Coach Inc., is a fashion holding company that operates both Coach and Kate Spade following a multi-year portfolio expansion strategy. With a market cap of approximately $22.36 billion USD, the company is a behemoth within the fashion industry, that contains key players like Capri Holdings, a conglomerate which owns Michael Kors, Jimmy Choo, and Versace, with a market cap of $3.023 billion USD.
The company also previously owned Stuart Weitzman, a footwear brand divested to Caleres, a consumer-driven footwear brand, in August 2025 amidst middling sales figures and a lack of synergies between Tapestry and Stuart Weitzman. The divestment of Stuart Weitzman has been disappointing for Tapestry, which is a company that seeks to grow an identity around acquisitions by steadily expanding its portfolio with the goal of becoming a major fashion conglomerate. This model is evident not only in its acquisitions of Kate Spade and Stuart Weitzman, but also in its attempted multi-billion dollar acquisition of Capri Holdings. The deal was blocked by the Federal Trade Commission (FTC), as it was seen to limit competition within the “accessible luxury” space.
With its portfolio now confined to only two players: Coach and Kate Spade, with plans to expand through acquisition seemingly abandoned, Tapestry must now look inwards and decide how to improve its key underperformer, Kate Spade. According to the most recent investors report, Kate Spade took up a mere 17.1% of total net sales from Tapestry, with Coach dominating the other 79.9%.
When the House Loses
The “accessible luxury” handbag market, which includes entry-level designer brands such as Coach, Michael Kors, Marc Jacobs, and Kate Spade, is fast-paced, particularly in the age of social media. Styles are quickly popularized and subsequently forgotten, with some trends going out of style within months. Brands in this category target young, typically working women in the millennial to Generation Z age range, which are two generations known for being heavily online. Therefore, success in the mid-market bag industry, which is heavily dependent on selling to younger markets, depends on brand differentiation and consistent creative direction.
Kate Spade fails to stand out in a crowded market. According to Tapestry’s May 2025 Internal U.S. Brand Health Survey, Kate Spade enjoys high brand awareness (holds a Top 5 position in brands consumers consider) but holds only 7% top-of-mind recognition. Furthermore, consumers describe the Kate Spade “confusing” and “not relevant,” while also simultaneously perceiving it as too conservative and mature. As one critic put it, “They over-corporatized it. Everything they did seemed to push it closer to Coach. They took away much of the brand’s whimsy. The brand is more boring than it was before.”
Ultimately, this problem appears to lie with Tapestry’s integration strategy. Rather than preserving Kate Spade’s independent identity, assimilation has blurred the lines between it and Coach, creating clash and overlap instead of synergy. Following its acquisition in 2017 by Tapestry, it promised that it would “[preserve] Kate Spade’s brand independence as well as retaining key talent.” However, soon following that statement, in August of the same year, key players like Kate Spade’s CEO Craig Leavitt left the company, with the creative director Deborah Lloyd following suit, hinting at internal misalignment.
Meanwhile, Coach, which has operated at similar price points to Kate Spade, has revitalized itself through high-quality materials, recognizable blockbusters, and sustained brand heat driven by celebrity and creator partnerships. The difference between the two brands is clear in the financials, as Kate Spade sales have declined by approximately 6% year-over-year (Tapestry FY2024 10-K). This decline includes a ~7.5% decline in women’s handbags, a key division, while Coach grew by approximately 6% in the same period. The divergence in sales performance between its two closely positioned brands, which share overlapping consumer bases, suggests a growing strategic risk. This risk highlights the need for Kate Spade to sharpen its identity and establish clearer differentiation within Tapestry’s brand portfolio.
Playing the Right Hand in Accessible Luxury
To achieve long-term growth, Tapestry must revitalize Kate Spade’s brand identity, restoring the creative distinctiveness that once set it apart. Currently, Tapestry’s management has decided to cut down their product offerings by 40%, in an effort to position the brand in a more cohesive way in alignment with their “One Kate” consolidation across all channels. Additionally, they have planned to amplify “blockbuster” styles to ~30% penetration, and lift brand media investment by ~60%.
However, beyond these operational changes, in line with Tapestry’s 2025 goal of “capitalizing on opportunities in under-penetrated geographies such as Southeast Asia”, they should focus on Kate Spade’s expansion into regions where they have yet to see growth and deep penetration. Reinforcing this growth opportunity, the Asia Pacific Handbag market is a strong one, with a CAGR of 8.11% between 2025 and 2032, in addition to a growing middle class with increasing disposable incomes. Examining its current stores and product presence, South Korea is an appealing option for Kate Spade’s East Asian expansion. However, this expansion must come with the understanding of cultural nuances and traditions, so that while it holds true to Kate Spade’s whimsical essence, it provides international audiences with culturally-sound and relevant products to be receptive and accepted by new customers. This can be achieved through local partnerships with designers and pre-established retailers in the fashion and accessible luxury space.
Zara x Ao Yes: Tailoring Locally to Gain Relevance
Founded in 1975, Zara quickly became a multi-billion dollar fast-fashion firm, producing chic yet affordable clothing. However, in the early 2020s, the brand began to transition from a fast-fashion framework to embody elements of high-end luxury; thus, repositioning itself as an accessible luxury firm. The rebrand came after Marta Ortega Pérez, the chairperson of Zara’s parent company Inditex, emphasized that Zara’s goal should be focusing on increasing relevance among consumers rather than mass production and becoming the largest retailer. A similar sentiment is currently reflected among Tapestry’s and Kate Spade’s management, where consumers are aware of Kate Spade’s brand but fail to see it as relevant. As such, Zara’s strategy to recalibrate internationally to increase relevance in the accessible luxury space can serve as a blueprint for Kate Spade.
To start, Zara began to focus less on mass production, eliminating its “one-size-fits-all” approach. The Spanish firm recognized that to maintain relevance the brand must be flexible and adaptable, continuously making headlines in news outlets and social media. Ongoing international partnerships achieved this as Zara was able to leverage local designers’ market insights, which enabled them to tailor products to local preferences. For instance, its most recent collaboration featured Ao Yes, a Shanghai-based designer brand that specializes in traditional Chinese attire such as qipaos and Tang-suits. Through its oriental aesthetic and seamless tailoring, Ao Yes became a distinguished name in China, with a strong loyal following. Zara partnered with Ao Yes to launch an exclusive Chinese New Year 2025 collection, featuring neo-Chinese inspired womenswear and menswear. This collaboration enabled Zara to penetrate the Chinese market further by generating conversations and loyalty among local consumers, with the hashtag “Zara Designer Series” (in Chinese) gaining 1.29 million shares.
Thus, rather than take a holistic approach and sell a single collection to all international markets, Kate Spade should consider partnering with local designers to tailor their products based on local preferences. Such collaborations would reduce the company’s excessive dependence on selling one vision of whimsy and pops-of-colour. As seen with Zara, regional-based brand collaborations not only attract but retain local consumers’ interest. As locals already recognize Kate Spade’s name, locally-tailored products make consumers feel seen and valued; hence, incentivizing locals to make that final purchase. For local designers, they are more than willing to partner with such accessible luxury brands as they are able to ride off of the brand’s globally recognized name and reach mainstream consumers.
South Korea: A Wildcard Yet to Be Played
Looking at potential options, South Korea presents itself as a viable region for Kate Spade’s expansion given the brand’s limited presence in these regions, and opportunities to build new product lines and capitalize on growing interest in the accessible luxury segment.
South Korea is home to Asia’s fourth-largest economy, and a relentless appetite for luxury goods. In South Korea, the most reliable luxury markets that used to come from Europe have now been replaced by American houses, such as Ralph Lauren and Coach. With sales increases for both of these brands in South Korean department stores and pop-up shops being sold out within days, this is the perfect opportunity for Kate Spade to capture this growing consumer sentiment and purchasing power. To start, having temporary pop-ups for Kate Spade’s products in the countries’ top three department stores, Shinsegea, Lotte and Hyundai Department Stores, is an ideal place for the company to test out sales and understand which products are most appealing to consumers.
Furthermore, Kate Spade could partner with South Korean-based brand Samo Ondoh, a contemporary bag brand with a distinctive daily look, characterized by their charming bunny logo. The label presents a unique balance of soft whimsy and modern minimalism, which matches Kate Spade's brand, making it a perfect partnership. Given Samo Ondoh’s popularity amongst Korean celebrities, particularly K-pop artists, creating a new handbag line between the two brands will allow increased exposure for Kate Spade within this emerging market, along with targeting their products to younger shoppers looking for accessible luxury purchases. Samo Ondoh’s unique bunny logo also fits with Kate Spade’s brand of creating useful yet playful bags, allowing it to preserve its sense of whimsy and discovery in front of new consumers.
Reclaiming the Ace of Spade
Kate Spade’s recent decline reflects a loss of clear identity, weak brand differentiation, and growing overlap with Coach, a tricky situation given they both operate under the same parent company. Although the company has begun to rebuild Kate Spade through product consolidation, increased investment in blockbusters, and stronger brand management, these steps are only the starting point. The path forward requires restoring a focused, creative viewpoint, expanding in regions with stronger demand growth in Asia, with a focus on South Korea. By building a partnership with Samo Ondoh through developing culturally grounded marketing and limited-edition capsules, the brand can introduce a new personality by staying true to its whimsical essence. By tightening its product strategy, improving regional relevance, and rebuilding an emotional connection with consumers, Kate Spade can reposition itself within Tapestry’s portfolio and compete more effectively in the accessible luxury market.
Editor(s): Asima Hudani
Researcher(s): Neha Rajamani
