Where Is The Strategy To Turn Kate Spade Into Profit?

From a net loss of $55 million 200 thousand in the first quarter of last year to a net profit of US $11 million 600 thousand in the first quarter of this year, we lost money. What happened to Kate Spade?

Recently, Kate Spade released its first quarter earnings for April 2nd. Data show that net profit in the first quarter reached 11 million 600 thousand US dollars (about 75 million 444 thousand yuan), up 7.5% over the same period last year.

Sales in North America also beat analysts' expectations, with a 17% increase in revenue.

Kate Spade's product strategy adjustment and online business are a lot of help.

In the first half of last year, Kate Spade shut down the medium and low price young sub line Kate Spade Saturday, as well as the men's wear line Jack Spade, and concentrated firepower to open up the Chinese market.

Although Kate Spade Saturday has been favored by many young people, in recent quarters, the company has noticed that Kate Spade Saturday's sales are weak, and the discount rate is too large, which has already endangered the gross margin and share price of the company.

In adjustment

At the same time, last year Kate Spade also focused on the layout of online business.

Craig Leavitt said that the company will click online to analyze which products are most likely to catch users' attention, and then place the corresponding products in the official website digital marketing channel.

Similarly, Kate Spade did not neglect the mobile terminals.

Craig Leavitt said that last year, the total flow of mobile terminals for Kate Spade has increased considerably, and the number of mobile phone orders has doubled over the same period last year.

The same store sales in the first quarter of this year rose 19%, the biggest gain in the five quarter, exceeding the ConsensusMetrix's 13.1% forecast.

"Along with this," Craig Leavitt, chief executive, said in a statement.

The company will focus on the long-term development of the core brand Kate Spade New York.

To this end, Kate Spade Saturday, which has just been released for two years, will end its independent operation mode, retain trademarks and products, and sell it in Kate Spade New York.

In addition, while improving brand positioning, this lightweight luxury brand has entered the Lifestyle category of children's clothing, sportswear, bedspreads, kitchenware, bathroom and so on to expand the brand exposure rate.

In the fourth quarter earnings report, CEO Craig Leavitt of the group said at a conference call with analysts: "these new products have brought us many new customers."

At the beginning of this year, Kate Spade ended with Seth.

This cooperation will open a new store within the year of sreis outlets, and has entered Xidan's Joy City in mid March to expand the Beijing market.

According to the insiders, the audience of Kate Spade is mainly young and fashionable women. Choosing Xidan Joy City and Aspray J Oteri J may be the effective way for the brand to open higher quality stores under the premise of controlling the cost. At the same time, Kate Spade is also controlling the expansion of the low price outlets.

Last year, Craig Leavitt has said that in order to deepen our links with Asian consumers, the group will open 100 stores in China.

Now, through the brand official website, Kate Spade has only 24 stores in Shanghai, Beijing, Sichuan, Zhejiang and other provinces, of which only 6 are in discount stores in outlets.

It is worth mentioning that two years ago, the brand operated 20 stores in the mainland of China.

The speed of opening 4 new stores in two years is far less than that of Michael Kors with 55 stores and Coach with more than 100 stores.