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Mobile sales are in fashion for Kate Spade

May 5, 2016 01:46 PM
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Sales on mobile devices doubled for luxury apparel and accessories manufacturer Kate Spade in the first quarter of 2016 compared with the same period a year ago.

Kate Spade, No. 140 in the Internet Retailer 2016 Top 500 Guide, does not break out online or mobile sales. Comparable sales including e-commerce grew 18.8% year over year. With e-commerce taken out, Kate Spade posted a year-over-year comparable sales gain of 7.8%.

CEO Craig Leavitt told analysts on Kate Spade’s Q1 2016 earnings call that mobile in particular is growing fast, with the number of orders placed on mobile devices having doubled year over year during the quarter. All of this, he says, signals a shift in consumer behavior.

“Our e-commerce sales were significantly higher than last year,” he said, according to a transcript from Seeking Alpha. “Our customer is increasingly beginning her journey online, making it a critical touchpoint to engage with her, establish an emotional connection and communicate our brand story.”

Also key to Kate Spade’s online success in Q1: free-two day shipping, which rolled out during the quarter.

“Although the results are still early, this enhancement has resulted in both customer acquisition and higher average order value,” chief operating officer George Carrara said, though he did not provide specifics.

Because its shoppers are consistently shopping across multiple channels, Kate Spade is taking extra steps to leverage its physical stores as fulfillment centers for online orders. Leavitt cited the “find it in a store near you” feature as an example. A shopper can go online, choose an item and click on the “find it in a store near you” button to find which stores within a certain radius of her location have the item.

“This is about providing the broadest possible selection for the consumer, not disappointing her (with out-of-stock messages) or anything like that,” Leavitt said. “This is about customer service, doing business with her on her terms. Also, obviously have the ability for us to improve our full-price sales by managing inventory more efficiently. Having more visibility across channels is also going to have an important financial benefit.”

For the first quarter ended April 2, Kate Spade reported:

  • Net revenue of $274.4 million, up 7.5% from $255.3 million last year.
  • Sales from Kate Spade North America of $218.7 million, up 11.8% from $195.6 million.
  • Sales from Kate Spade International of $48.9 million, down 6.9% from $52.5 million.
  • Net income of $11.6 million, compared with a loss of $55.2 million.
 

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