Entrepreneur Kate Spade on when it’s okay to part ways with your business
The renowned handbag designer who started multimillion-dollar label Kate Spade says no matter how hard you’ve worked to build a business from the ground up, there comes a time where it’s best to step away from it.
Discussing their business story on NPR’s How I Built This podcast, Kate Spade, who now goes by Kate Valentine Spade, and her husband and business partner Andy Spade describe how they created the handbag empire from nothing in the 1990s, selling products from their New York apartment.
It took about three years before the couple started to draw a $US15,000 salary from the business, which now has revenue of more than $US1.3 billion ($1.66 billion) and was last year sold to fashion giant Coach for $US2.4 billion ($3.2 billion).
The co-founders describe a “snowball effect” for the business, where sales just kept getting bigger and bigger until designer retailer Neiman Marcus stepped up in 1999 with an offer to buy a majority stake in the business for around $US30 million.
It was a big win for the couple, who would later sell the rest of their stake in the company to the same buyer in 2007. Speaking to NPR’s Guy Raz, Kate Spade said there came a time when selling out of the business completely was the best move for her to work on other projects and spend time with her daughter.
Once you sell part of your business to another party, you have a kind of boss figure watching over you, Spade says.
“You’ve heard so many horror stories about people who sell their business and then they stay and then they fight and then they sue… and I just thought, ‘ugh, that’s too ugly for me’, so we left on good terms.”
The Spades exited the business more than 10 years ago and while it still carries the founder’s full name, Kate Spade has gone on to agin be her own boss in other brand new projects; in 2015, the Spades launched a brand new shoe and handbag business called Frances Valentine.