Power Couple

The fact that the first product was a handbag, Kate says, was "kind of random." As a fashion stylist -- and consumer -- she found herself looking for accessories she just couldn't find, even in New York. Back in 1993, the handbag market was largely a tedious landscape of brown and black leather, light years away from the kaleidoscopic smackdown it has become. And that made it ripe for innovation, even by two Midwestern greenhorns.

But with no fashion training, Kate was intimidated by the prospect of designing a product. "Andy can see further out -- without being nervous," Kate says. "I can see too -- but I know what could happen." Andy egged her on: "Katie, it's the idea," he'd say. If you have a great concept, you can get some technical expert to lay it out. So Kate made a prototype out of construction paper and took it to a pattern maker, and then to a sewer who made a sample.

The first bag was a simple square, burlap with a raffia fringe. The material was the default choice when no company would sell them the fabric they really wanted in the tiny quantities they could afford. Eventually, they produced a few more samples in bright linens and introduced them at the big Accessories Circuit show in New York. In short order, they had signed up Barneys, Fred Segal, and Charivari, three of the hottest retailers in the business, and garnered flattering editorial coverage in Vogue and Elle.

Still, looking at their bank statement, Kate was in despair. "I said, 'Andy, we didn't even cover the cost of doing the show or making the samples!' It was kind of a loss. I thought, It didn't work out and now we have to stop."

Once again, it was Andy's vision and bravura that kept them going: Getting such great accounts, he insisted, would build their image. For three more years, the company got good notices but made little money. Refusing to seek outside funding, Andy kept working at the ad agency, helping out with promotion and marketing on weekends and evenings, while Kate scoured the markets for interesting fabrics.

In 1995, the two were married. A year later, Kate won her first CFDA award, an industry imprimatur, and several collections were big hits. Andy finally made the leap, leaving TBWA\Chiat\Day to work full-time on the company. "I thought it was a lifetime opportunity, and I would regret it if I didn't try," he says. "I figured I'd do it for two years until we got it up and going, but it just started growing and growing. It took every ounce of energy we had, and it just didn't stop."

As the company took off, the need to define roles became more urgent. Andy, who had always functioned best in a creative role, assumed the CEO mantle despite having little experience and, frankly, little interest in the operational side of the business. In 1999, Neiman Marcus and Saks Fifth Avenue adopted the line for all their stores, making the company's business soar. Additionally, Neiman bought a 56% stake in Kate Spade for $34 million. Recognizing the need for more industry expertise, they hired Robin Marino, an executive at Burberry Ltd., as president.

Striking a blow for boundaries between their professional and private lives, the Spades finally stopped shipping out of their apartment and took a floor in an old building in New York's Flatiron district. They now occupy five floors in the building. Kate's office is one floor above Andy's. But to Andy's occasional dismay, the boundary setting had its limits: Kate would begin talking about business the moment she woke in the morning. "Andy would say, 'My God, your feet haven't even touched the ground!' " Kate says. Now, they try to keep shoptalk down at home.

The two had what may have been their biggest difference over the business in 1996. Andy felt it was time the company leaped into freestanding stores, while Kate resisted the idea. "I was really hesitant," she says, because of the financial commitment. But they have a simple rule for resolving such conflicts: The partner who feels the most passionate gets to make the call. So they began with a tiny 300-square-foot space on the fringes of SoHo; the flagship is now 10 times bigger. "Now Andy gets to say, 'I told you so,' " Kate laughs.

The Jack Spade store around the corner is a sort of laboratory for Andy Spade's ideas about marketing and merchandising. It's filled with odd objects -- a huge stuffed shark, an apothecary chest filled with boy things such as guitar picks and rulers and razors -- and houses a lending library with fella-friendly authors such as Sir Walter Raleigh, and an old Boy Scout manual. There's Jack Spade cocoa and, soon, a proprietary steak sauce. Jack Spade films (the latest of which, Dimmer, has been accepted at Sundance) are available on DVD. And, oh yes, there's an array of messenger bags in waxwear, canvas, and leather; ties, shirts, and mittens on strings, all for sale. The idea? To embody the brand in a way that doesn't feel like a retail store. "People hate when you try to sell them things," Andy says. He knows that younger consumers are most intrigued by things they find themselves, not what's shoved down their throats through advertising.