Kate Spade Stop Sales Promotion To Avoid Overexposure

According to foreign media sources, Tumi Holdings Inc., a luggage manufacturer, said in its first quarter earnings report that it is "taking measures to reduce its participation in promotional activities so as to maintain brand value for a long time".

Over the past few quarters, Coach Inc. has also reduced sales of its brand shops and online stores, as well as the number of outlet sales.

For the strategy of reducing sales promotion, Leavitt believes that the amount of Kate Spade participation in promotional activities will be a step in the company's multi-channel approach to establishing quality sales, which will be a very important part of the company's strategic growth.

For the future development, the international field has been regarded as an important expansion area by the company, and has opened fourth global flagship stores in Hongkong.

In addition, e-commerce platform is established in Singapore.

At present, Kate Spade says it has reached a new distribution agreement with garment manufacturer Exclusive Brands International SA, which will increase the intensity of Kate Spade New York expansion in Latin America.

Because of the new strategic partnership, Kate Spade will no longer operate directly in Brazil.

But the company will assess Brazil's business with Exclusive Brands International SA.

Exclusive Brands International SA has 17 distribution rights in China, South America and the Caribbean.

In addition, Kate Spade and Grupo Axo also have separate business agreements in the Mexico market.

According to the latest report released by the company, the company's net loss for the quarter ended April 4, 2015 was $55 million 200 thousand, diluted to $0.43 per share.

In the same period last year, net profit was $46 million 200 thousand, or $0.37 per share.

On the basis of the adjustment, including some gradually reduced costs, the diluted earnings per share were $0.30.

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On the basis of this, the deficit expanded from US $38 million in the same period last year to US $54 million, about 0.42 US dollars per share.

Net sales rose 14.2% to $255 million 300 thousand from $223 million 600 thousand.

While same store sales rose by 6%, and all direct consumer sales, including e-commerce, recorded an increase of 9%.

Some business operations are decreasing and gross profit accounts for 62% of sales.

Divided by category, this quarter

The increase was mainly due to women.

And the growth of small leather goods, both of which are important parts of women's series.

In addition to men's series Jack Spade, children's wear series has become another important pillar of growth, including baby products and baby clothes introduced in August.

The New York stock exchange recorded Kate Spade & Co. shares down 10.4% to 29.16 dollars on Thursday, due to bad earnings reports.

In fact, in the contradiction between its struggling sales growth and maintaining a good profit balance, Kate Spade will continue to face a further squeeze in the short term.

Craig Leavitt, chief executive of Kate Spade, said the company's goal would be to reduce the brand's dependence on endless promotions, so as to establish a "quality" full price sale and consider the company's sales target of $4 billion to be "realistic".

Although Kate Spade did not disclose the time to achieve the target of sales of US $4 billion, Leavitt emphasized that the company "has increased significantly in terms of sales and profits in the past year.

For us, commitment to quality sales is a key component. "

He explained that with the drop in flash sales, when the company has promotional activities, the overall result tends to be better than a number of sales activities.

However, the company's total sales have improved, and the company is reducing its participation in promotional activities in other distribution channels, such as those offered by department stores.

Although the company has been discussing these issues with wholesale customers, he also believes that "it takes time to implement."