Photo Credit: thestorefront.com
Shares for designer brand Kate Spade rose more than 9 points on Thursday after the announcement that they would be closing all Kate Spade Saturday and Jack Spade brick-and-mortar stores — though the brands will both continue to live within other parts of the business.
In doing so, the company plans to consolidate its focus in order to build Kate Spade into a $4 billion brand.
“A key tenet of our road map for growth is ensuring that we are disciplined and forward-looking with our investments, putting our resources behind targeted initiatives that will maximize profitability,” CEO Craig Leavitt offered in explanation according to CNBC.
And they will have to maximize profitability if they hope to a projected 20% jump in sales for 2015.
“What’s encouraging is that we just saw them (Kate Spade) successfully sell products while pulling back promotions, in a holiday period when everyone has been calling out promotions,” analyst Simeon Siegel told Reuters.
Fans of the more casual Saturday brand can find some reprieve that the line will still be available on its e-commerce site for at least the first half of 2015.