Kate Spade Tries Hello Kitty-ish Cute Cat Fashions

Kate Spade (KATE) is kind of turning Japanese. The lone survivor in a corporate closet that once included Juicy Couture and Lucky has launched a retail campaign with the theme 17 Days in Tokyo. The line includes handbags printed with sushi patterns and a little geisha-girl iPhone case, but most of the Tokyo-themed products seem to hint heavily at Hello Kitty, the moonfaced cat design that has been a Japanese licensing giant for 40 years.

Here’s Hello Kitty:

Photograph by Charles Sykes/AP Photo

Here’s one of Kate Spade’s new bags and one of its new iPhone cases:
Courtesy Kate Spade

And then there’s the name of the Kate Spade collection: Hello Tokyo.

Courtesy Kate Spade

The cute-cat strategy has paid off handsomely for Sanrio (8136:JP), the Japanese company that’s been selling Hello Kitty rights since 1974. While the movies and TV projects haven’t turned out so well, the mouthless feline can still be found on a range of products from baby onesies to G-strings. There’s even an official Hello Kitty pattern in the Scottish Register of Tartans and recently the little cat popped up on a brand of beer. Shintaro Tsuji, the company’s founder and chief executive officer, is now worth about $631 million, according to Bloomberg.

It’s unclear whether Kate Spade has a licensing deal with Sanrio. The little mouth on the Kate Spade critter, and the use of the word “Cat,” suggest that it doesn’t, although the company did not immediately return phone calls on Tuesday morning.

Susan Scafidi, founder of the Fashion Law Institute at Fordham University, said the line could spark a small legal battle; a major lawsuit seems less likely given the limited product range. “The actual design looks a bit more like the plastic cats waving in every storefront in Chinatown…which I suspect was a deliberate design choice,” she said.

The odd thing is, Kate Spade doesn’t need to toe the line of trademark rights these days; everything the company does seems to catch fire. Its earnings report Tuesday showed a 49 percent boost in sales in the recent quarter, while its loss narrowed to just $4.4 million.

Indeed, the company seems to be quickly carving out a sweet spot just below luxury. Its more expensive pieces of apparel don’t top $1,300. Its top-of-the-line crocodile-skin handbag costs $998 and none of its jewelry sells for more than $600.

“We are seeing traction with what we call our splurge customer,” Kate Spade Chief Operating Officer Craig Leavitt said on a conference call. “(She) spends more than $500 on a single item, buys multiple items each time she shops and makes multiple purchases through the year.” And maybe she likes cute cats, too.

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12 August 2014 | 5:11 pm – Source: businessweek.com

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