Kate Spade to Wind Down Kate Spade Saturday, Jack Spade Stores
Retailer Anticipates Strong 2014 Preliminary Sales but Weaker 2015 Forecast
Kate Spade will close its 12 company-owned Jack Spade stores as part of a brand overhaul
By Chelsey Dulaney
Jan. 29, 2015 9:04 a.m. ET
Kate Spade Co. said Thursday that it would shutter its Kate Spade Saturday and Jack Spade stores as it seeks to focus on its flagship Kate spade new York brand.
The company said it would close 16 company-owned stores and three joined with locations for its lower-priced Kate Spade Saturday brand in the first half of 2015 as it transitions the line to a brand under Kate spade new York. Kate also plans to close down its 12 company-owned Jack Spade stores in the first half of the year as it shifts to selling the brand online and through retail partners.
The moves, which could cost the company up to $39 million, come as Kate reported strong preliminary results for 2014 but gave a weak sales forecast for 2015.
For 2014, Kate expects to post sales of $1.13 billion to $1.14 billion as direct-to-consumer comparable sales grew 26%. Analysts polled by Thomson Reuters had expected $1.1 billion in revenue.
For 2015, Kate forecast net sales of $1.2 billion to $1.28 billion, below analysts expectations for $1.39 billion in revenue. Kate said it expects its sales to be hurt by reduced promotions and flash sales.
Kate Spade’s margins have been pressured in recent quarters amid an increasingly competitive handbag and fashion retail segment, with sellers cutting into margins by lowering prices to compete for a dwindling amount of consumer dollars.
