Don't worry about starting a company, says the co-founder behind the Kate Spade and Jack Spade brands. If your product is great, the rest falls into place.
When Andy Spade and his then-girlfriend Kate Brosnahan emptied their 401(k)s and maxed out their credit cards in 1993 to design a handbag that was both luxurious and affordable, neither envisioned launching one of the most beloved brands in the world. Instead, they focused on one task at a time--like turning to a potato sack maker for burlap and linen to create an early sample purse. By 2006, they sold their chain of 26 stand-alone retail stores and the men’s line Jack Spade to Liz Claiborne for $124 million.
Two years after we launched the company--this was 1995--Saks Fifth Avenue and Neiman Marcus decided they were going to order bags for all their stores for the holidays and Christmas. This meant our production suddenly went from 1,000 bags to 20,000 bags.
They said, “This is serious--we have these demands to do so much business in the fourth quarter. Can you keep up with the production?” Kate and I looked at each other and nodded our heads yes, but of course we had no idea what we were going to do. We needed the orders, so we said we’d do it.
We ran around for the next two weeks, found factories, had them make samples, do our specs, supply them with patterns, worked out the kinks. And then within a matter of months we had to produce another 20,000 to 30,000 bags. Going from 1,000 bags to that many bags puts a lot of strain on the company. Of course, if you deliver them and they fall apart, the stores don’t have a sense of humor about it. The customer doesn’t either. It was a big problem for us.
The next year, we were ready to ship about 100,000 bags for the holidays and we had a flood in the factory. It ruined our production, but the stores were counting on the shipments. They said all the shelf space was ready, and that if we missed the holiday window--the two weeks when they sell 80 percent of our products--then we were out. They could easily add Prada or Coach to fill that space. It was really scary because their assumption was that we couldn’t handle a real business--that we were just a couple of kids. So we actually got fans and started drying them out to try to salvage all the bags we could.
That was a lot of pressure. And we did have some quality issues. We recalled some bags from Barney’s because they weren’t up to the quality we wanted them to be at. But rather than have Barney’s call us and say they were falling apart, we said we need to take these off your floor and get you new ones. They were good about it. They said it hurts. But it’s better than us selling bad product.
When people ask us now how we started the company, I tell them we didn’t start the company. We were just making a bag. The product is all anyone cares about. They don’t care about the company. If you have the orders and you have the stores, you’ll be able to find financing. You can’t worry about that before you know what you’re going to make. Don’t print a business card before you have a product.