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Kate Spade is so popular worldwide that its parent company shed all its other principles and then renamed itself after the brand. And its outlook is as optimistic as the Kate Spade brand: Chief exec Craig Leavitt told Bloomberg that the company intends to reach $4 billion in sales with Ralph Lauren as its "business analog." For an idea of how much they have to grow to get there, the colorful company is currently one eighth the size of Ralph Lauren Corp.
While investors aren't saying the goal is unachievable, they're hesitant to buy totally into the dream. Not only is Kate Spade in competition with Ralph Lauren itself, but also Michael Kors, Coach and Tory Burch. Also, as Marie Driscoll, founder of Driscoll Advisors said, "They have far to go. Ralph Lauren created lifestyle branding. When you're wearing Ralph Lauren, it says 'Upper middle-class American.' With Kate Spade, there is a kitschy element, a youthful, playful element to it. When you wear that clothing, it says, 'I am wearing Kate Spade.'"
· Kate Spade Wants to be Ralph Lauren, Seeking $4 Billion in Sales [Bloomberg]
· Deborah Lloyd and Brad Goreski Loosen Up Kate Spade [Racked]
· Bringing It Together at Kate Spade: Backstage, Beauty, and Brad [Racked]