EMILY IRONS | GABRIELLE ALVARADO | JONATHAN MATOS
C O M PA N Y OV E R V I E W
and style philosophy: Manners, Occasions, and Style
1991 - Kate leaves her job as senior fashion editor & head of accessories at Mademoiselle magazine to pursue her handbag dream
2007 - Kate Spade is sold to Kate Spade & Company (formerly known as Liz Claiborne, inc.)
1993 - Kate Spade founds the company with the mission to create the perfect handbag and launches her fist line made up of six boxy nylon handbags
2008 - Deborah Lloyd takes over as president and creative director after the takeover the year before, pushing the company into a full-fledged lifestyle brand
1996 - First store opens in SoHo, New York City - The Council of Fashion Designers of America awards Kate the “America’s New Fashion Talent in Accessories”
2010 - First Kate Spade store in London opens
1998 - Kate is once again awarded be the CFDA, this time for “Best Accessory Designer of the Year” 1999 - Kate and her husband Andy sell 56% of the company to the Neiman Marcus Group 2004 - Kate Spade opens a flagship store, their first expansion into the international market - Launch first home line to include wallpaper, bedding and china - Kate publishes a series of three books about her personal style
2012 - First Kate Spade Saturday store opens in Harajuku, Japapn 2014 - As of December 31st, the company had 108specialty retail stores and 58 outlet stores within North America - Craig Leavitt becomes CEO of Kate Space & Co. - Kate Spade’s home collection wins three design awards
H O N G KO N G : TRAITS OF THE COUNTRY SOCIAL / CULTURAL
Hong Kong is a patriarchal society with some exceptions. Hong Kongers depend greatly on a hierarchy system and have strict family values. The concept of ‘face’ and Confucianism are both very important to their culture, as pride, prestige, and dignity are the basis for their everyday behavior. Structure is very apparent in the Chinese culture and ranking an individual through social status is considered normal. However, merits can quickly elevate an individual’s social ranking. The country supports those who strive to elevate themselves and there are several government and private funding opportunities available for talent and education. Chinese are also very respectful of their elderly. Age is part of the cultural hierarchy and there are appropriate ways to talk to one’s elderly and behavior to display. A normal household in Hong Kong may consist of grandparents, their grandchildren and their parents.
POLITICAL
Hong Kong is politically intertwined as a special administrative region of China. Hong Kong reverted to China ‘s administration on July 1, 1997. Although Hong Kong is not considered a communist country, they exist in limited democracy. Their legal system is also based on English common law. Influence of Britain’s occupancy is still very detectible and culturally distinguishes them from mainland Chinese. Direct election is permitted at 18 years of age and indirect election is limited to about 200,000 members of functional constituencies. Hong Kong is open to business with other countries and responds well to foreign trade. Hong Kong participates in international organizations such as APEC, AsDB, BIS, ICC, ICFTU, IHO, IMF, IMO (associate), Interpol (subbureau), IOC, ISO (correspondent), UPU, WCL, WCO, WMO and WTO.
Many Hong Kongers are fighting to keep their culture distinct from that of the rest of China and resist many efforts of their government to unify its people. Hong Kongers see themselves in superior light to that of their neighbor China. Hong Kongers are currently feeling threatened by the increasing desire of mainland Chinese to enter Hong Kong due to the limited resources and fear of losing cultural identity, overpopulation, and increasing pollution.
ECONOMIC
Hong Kong has a free market that is highly dependent on international trade as natural resources of Hong Kong are limited. Many of their foods and raw material must be imported. Because of China’s growing openness to the world economy, Hong Kong has further integrated its economy with them. Being plugged into China in the long run is a structural positive and competitive advantage for Hong Kong, but is also risky for Hong Kong in the short-medium run. The government expects growth of 1 to 3 percent this year.
GEOGRAPHIC
Hong Kong is located in southeastern region of China; it covers Hong Kong Island, Kowloon, Lantua Island and New Territotories. It also includes Victoria Harbor which is between Hong Kong Island and Kowloon. The total landmass is 1104 square kilometers
C O N T R I B U T I N G FAC T O R S LABOR
Hong Kong has a highly skilled and educated labor force. There is a relatively low unemployment rate within Hong Kong. The government tries to regulate the population and introduce new technologies to their infrastructure that in return creates many jobs. Many companies are also attracted to the business segment of Hong Kong and therefore there is an abundance in the job market. The Hong Konger’s’ attitude also contributes to the well being of the countries work force. In the Chinese culture, this need to fulfill “yao”, their purpose in life, is a strong desire that makes life worth living and working for.
INPUTS
Hong Kong invests a large amount of money into their people’s education, health and well-being, and the business sector. In spite of their small size, Hong Kong is the 9th largest entity in the world. Taxes collected from residence, businesses, and tourists are spent efficiently to benefit the Chinese residents of Hong Kong. Attractive tax rates make it desirable for companies to locate their businesses in Hong Kong. Corruption is something that is highly frowned upon and the ethical behavior of their government is highly regulated.
PRODUCTS
Hong Kong is a thriving city and produces some of the most well educated and competent professionals. Hong Kong also produces fresh vegetables, poultry, fish and pork in agriculture and textiles, clothing, tourism, banking, shipping, electronics, plastics, toys, watches and clocks play a significant part in their industries. In recent years, we have seen a boost in the production of new technologies from Hong Kong.
TRANSPORTATION
Not many have their personal cars in the city due to Hong Kong’s complex public transportation, including double decker buses and trains that operate even in underwater tunnels to connect the islands. The MTR, Mass Transit Railway, is the rapid transit railway system of Hong Kong, which is the most profitable system in the world. Jingjiu train, the connector of China and Hong Kong makes traveling from the two easy. Ferryboats are also commonly used to get from one island of Hong Kong to another.
BUSINESS CLIMATE
Hong Kong business people have studied abroad and have an international view on business. The business climate here is wide open, with free market, limited government involvement and modernized. Business activities are not only competitive, but also honest and quick with the goal to make money.
EFFECTS OF QUOTA REMOVAL
Quota removal has enabled importers and retailers to source from locations offering the best products and services. This produces better results for both consumers and world manufactures. Consumers reap the gains of lower prices, intensifying business competition. However, this streamlining of products and services has also led to many businesses closing down. This has caused a reduction in sourcing locations as of January 1, 2005. China has become the supplier of choice for clothing and textiles for many US apparel companies and retailers due to its large supply of inexpensive labor and ability to produce a variety of quality of clothing and textiles.
CODE OF CONDUCT TRADE REGULATIONS
All goods imported into the United States must pass through customs, and in most cases, a duty must be paid. The amount of the duty is based upon the classification and volume of the goods. The same is true for other countries throughout the world into which we ship our product. The Office of Foreign Asset Control (OFAC) restricts companies from conducting trade with those individuals or businesses included on their sanction list. In addition, it is essential that the product’s country of origin be clearly stated on all documents. All documentation relating to product must be truthful, complete and accurate. All information furnished to any customs official or to any agent hired to assist in importation also must be accurate and truthful. If you are involved in the importing or exporting of product or other merchandise, you must review the Company’s policy on Import/Export which is available on our Company intranet under “Company-Policies.” For a current OFAC sanction list or other questions in this area, please contact the Trade Compliance Department.
ETHICAL GLOBAL SOURCING
We are proud of our Company’s reputation in Social Responsibility and its relationship with non-governmental organizations (NGO’s). We maintain ongoing dialogue with several NGO’s including People for Ethical Treatment of Animals (PETA). When PETA makes a request it is evaluated for both reasonableness and its impact on our operations. When reasonably practical, we work to honor those requests. Our current commitments to PETA are as follows:
BAN ON SKINS SOURCED FROM INDIA AND CHINA
Since May 2000, the Company has had a commitment with the People for Ethical Treatment of Animals (PETA) to ban sourcing of hides from India and China. This commitment will not expire until we receive word from PETA that certain improvements have been made in each country.
USE OF FUR/EXOTIC SKINS
Kate Spade & Company has committed to being “fur free”. This does not include “shearling.” While KS&C has not formally committed to PETA that our brands will not use exotic skins, we strongly discourage it and to date have not used these materials.
BAN ON MERINO WOOL FROM AUSTRALIA
We have committed to PETA to give purchasing preferences to suppliers of nonmulesed wool providing that the product meets our quality and price point requirements. Mulesing is a painful procedure performed on sheep to prevent flystrike disease. PETA has informed us that there are alternative methods that are less painful that could be practiced. We expect our licensees to make good-faith efforts to find alternative sources.
BAN ON COTTON SOURCED FROM UZBEKISTAN
Prohibition of forced labor is an important element of our Standards. We have seen reports of the widespread use of forced labor, including in some instances forced child labor to harvest the cotton fields in Uzbekistan and at this time, we are joining other brands, retailers, trade organization and non-governmental organizations, to voice our concern with a goal to eliminate this practice. It is our expectation that our business partners will not knowingly source cotton from Uzbekistan and they make an effort to communicate our concern for this issue down the supply chain. We will continue this ban until we have seen evidence that progress has been made to end the use of forced labor in the Uzbek cotton industry.
CONFLICT MINERALS
In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Act”), KS&C is committed to ensuring that any “Conflict Minerals”, defined as Tin, Tungsten, Tantalum and Gold (“3TG”), contained in our products are sourced with due respect for human rights and not contributing to conflict in the Democratic Republic of the Congo (“DRC”) and the adjoining countries (together with the DRC, the “Covered Countries”). Covered Countries include: the DRC; Angola; Burundi; Central African Republic; the Republic of the Congo; Rwanda; South Sudan; Tanzania; Uganda and Zambia. KS&C does not ban the use of minerals that are sourced in the conflict-affected and high-risk areas when they are sourced in accordance with existing international standards.
S W O T A N A LY S I S O F H O N G K O N G STRENGTH - Hong Kong is a free port. - Hong Kong is a member of the European Free Trade Association (EFTA), namely Iceland, Liechtenstein, Norway and Switzerland - Hong Kong is a gateway to China and other neighboring Asian countries - Leading Financial centers. Hong Kong has world-class banking and financial institutes and ex perience in international trade practices, securing timely payments and document processing.
WEAKNESS - In terms of monetary cost comparisons, Hong Kong has higher operation charges than neigh boring ports such as the Shenzhen, Yantian, Shanghai in China, and Kaohsiung in Taiwan. - Limited land use - Natural inputs shortage
OPPORTUNITIES - Hong Kong trade fairs and conventions are expected to become important focal point for Mainland Chinese and international businesses seeking joint venture partners and business opportunities in China -Government support for companies - Produce high quality products
THREAT
- Current minimum wage - Low currency rate - China political and economical control - Low cost competitors
COUNTRY’S BUSINESS ETIQUETTE TYPE OF CULTURE Hong Kong is a mix of Asian and European business cultures. This sophisticated and cosmopolitan country has highly educated people and is motivated by success. School children are taught the basics of business from a very young age. Hong Kong is 98% Cantonese Chinese but its people view themselves different from other Chinese. Cantonese habits and customs are dominant. Family pride is very important and an individuals actions, education, wealth, and reputation reflect positively or negatively on the entire family. Business is not strictly business in Hong Kong. Business actions can reflect on the intentions of an individual towards family matters. Sons are expected to take over family businesses and women are expected to support the business in any way they may contribute while also raising their children to be knowledgeable in their family’s trade.
MASCULINE OR FEMININE
At 57, Hong Kong is a masculine nation being success-oriented and driven. Examples of this can be seen in service people working very late at night and students caring greatly about their exam scores and ranking. Foreign businesswomen have little trouble conducting business in Hong Kong and have little to no boundaries. However, Chinese businesswomen are generally expected to have qualities of a proper lady such as refusing to drink alcohol in public, bowing their heads as a sign of respect, and being soft spoken.
NEGOTIATION STYLES AND STRATEGIES
Negotiations may be slow and detailed but send senior people with expertise to make decisions on the spot. Business deals may be sealed with a handshake alone so be prepare to compromise. Lawyers are not commonly included in negotiations until contracts are drawn up and signed. Things to remember: - Tea is served in meetings and you should not drink until your host takes the first sip. Untouched tea symbolizes the end of the meeting. - “Yes” will not always mean an agreement but may mean, “I hear you”. “No” is generally not said and instead you might hear “this may be difficult” or “I will have to wait”. - Office spaces are regulated by a “Fung Shui” professional. They advise not only furniture arrangement, but also moving date, opening date, entrance ect. to be in harmony with cosmic forces. - Appointments are generally made 1 month ahead of time. - Unless invited to do so, never bring spouses to a business dinner. If spouses are present, business will not be discussed.
TYPE OF COMMUNICATION
Hong Kong has very advanced technologies and communicate in person as well as through their electronic devices. Emails, telephone calls, and faxing are all accepted ways of communication. However, the Hong Kongers greatly appreciate a personal letter when business is being done. Similar to America, men, women and children of Hong Kong, may greet each other with a handshake.
SOCIAL AND CULTURAL ELEMENTS
A. APPROPRIATE BUSINESS ATTIRE – Hong Kong residents are very style conscious and dress well. It is important for them to represent themselves modestly and as clean professionals. Their fashion taste looks more to Japan rather than Britain or America for inspiration. Businessmen wear conservative, lightweight Western style suits while businesswomen wear conservative dresses suits or skirts and blouses. Wearing a good watch will be noticed and be taken as a sign of competence. Most hotel restaurants that meetings might take place in, require a coat and tie in the evenings and women should wear cocktail dresses or evening pants. B. INTRODUCTIONS – Introductions usually start with the highest ranking person first and decline to the lowest. Depending on the circumstance, however, the eldest person may be introduced before considering rank. Asking about a person’s health or activity upon greeting is polite in the Chinese culture. C. GREETINGS - The Chinese will nod or bow slightly as an initial greeting and you may also wait for a handshake if offered. You should bow more deeply and allow whoever is superior to rise first. D. PRESENTATION OF BUSINESS CARDS BUSINESS CARDS should be printed in both classical Chinese and English. Present your card with the Chinese characters up with both hands as a sign of respect. Business cards are personal and should be treasured. Never write anything on business cards in front of the donor and look at them upon receiving the cards.
E. FIRST NAME OR TITLE - There are two parts to a Chinese name, the family name always comes before the given name. Always use the family name and the appropriate tittles until specifically invited by the person to use their first names. You can address the Chinese with Mr, Mrs, Miss or a professional title followed by the family name. For example, it is accepted to call Lau Gan Lei by Mr. Lau or Doctor Lau. F. GESTURES - Like other Asians, the Hong Kong Chinese may stand closer when talking compared to what is normal in the USA. However, they are reserved and uncomfortable with hugs, kisses or even a pat on the back with new acquaintances. Winking is a rude gesture. Pointing with your index finger is an insult and should only be used for animals. To beckon someone, extend your arm with your palm down and make a scratching motion with your fingers. Request your bill by making a writing motion with your hand. G. COLORS, NUMBERS, AND THEIR MEANINGS - The Chinese culture that Hong Kong shares is very sensitive to luck and consider it when making decisions. Decisions such as choosing a residence, telephone number, business address, wedding dates, festivals and other events are always affected by what lucky month, number, color and symbol they are associated with. The number eight is a popular lucky number and sounds similar to the Cantonese word “fa” which means prosperity and wealth.. Even numbers are preferred over odd numbers as they believe they reflect harmony and balance, 2 representing harmony and 6 success. Yellow, red, and green are their lucky colors while white may symbolize death.
H. GIFT GIVING in Hong Kong is a part of their business culture and communicates respect and friendship. Be prepared to bring small gifts at the first meeting such as high quality cognac, brandy, candy, pens or something from your home country or state. When invited to a Chinese home, never forget to bring a gift as well and to present your offerings with both hands. If you are the receipient of a gift, never open the present upon receiving unless requested by the giver. Gifts should always be given in numbers of 3, 8, and 9 but never in groups of 4. I. TIME - Punctuality is expected and respected. Allow courtesy time, usually around 30 minutes, if someone is late for an appointment with you. Hong Kong business hours are not as straight forward as those in the USA, UK or Australia. However, the standard operating hours of shops is usually considered from 10 am – 7pm although many operate much longer. Other markets such as Mongkong and Yau Ma tei often do not begin operating until 3 pm and close at 11 pm. J. JOKE TELLING - The Chinese enjoy an appreciate humor. Jokes can break the ice between new acquaintances and develop camaraderie. However, foreigners must always remember that language barriers may hinder their joke telling and may not be understood in the same way it is in the visitor’s culture.
BUSINESS ENTERTAINING
A. PROPER USE OF UTENSILS – You are not expected to know how to use chopsticks if you are not from Hong Kong or other Asian countries. You may always request for a fork.
B. TABLE MANNERS – Just like in America, toasting is a tradition in many Chinese dinners. A toast is often made in the middle of a banquet and if the guest of honor rises. Tipping in upscale restaurants is more common than when eating out at casual eateries. Burping, holding the bowl to your mouth, slurping and scraping your plate is also a complement to your hosts. You may embarrass your host if you take the last piece of food on the tray. Refuse a second serving at least once to avoid seeming greedy. C. ALCOHOLIC BEVERAGES - Hong Kong is listed as one of the top 10 countries with the most alcohol consumption relative to its population. While proper Chinese women are expected to steer away from alcoholic beverages, foreign business women may consume alcoholic beverages without judgement. People in Hong Kong often reward themselves with drinks after work with colleagues, family and friends. A staple selection of beer, rice wine, whiskey and sake are often seen in many common restaurants. D. APPROPRIATE CONVERSATION SUBJECTS - Topics such as Chinese history, tradition, music, art, culture, food and architecture are always safe subjects to talk about. Polite conversations can start with casual inquiries about your health or business. E. TOPICS TO AVOID - Avoid topics that may cause embarrassment and raise conflicting opinions about the political situation of China. Nor should you point out anything negative about their food or dining habits. They also do not appreciate talking about Taiwan. Overly specific or detailed inquiries such as asking where they might be going after a gathering may be considered intrusive.
TA R I F F A N D R U L E S O F O R I G I N F O R H O N G KO N G , C H I N A Hong Kong, China is a free port and does not levy any Customs tariff on imports or exports. There is also no tariff quota or surcharge. There is no value added taxes nor general services taxes. Excise duties are levied only on four types of dutiable commodities, namely liquors, tobacco, hydrocarbon oil and methyl alcohol. In general, all cargoes imported into / exported from HKSAR via air, land and sea are subject to Customs control which is done primarily through inspection of documents such as manifests. Physical examination of the goods, if necessary, is mainly conducted on a selective basis. Origin certification is not required for imports. The certification system in Hong Kong, China is administered to facilitate Hong Kong, China’s export to foreign markets. The system establishes the origin of goods which Hong Kong, China exports to meet the requirements of the importing authorities.
T R A D E R E L AT I O N S B E T W E E N H O N G K O N G A N D U N I T E D S TAT E S HONG KONG PRACTICES FREE TRADE
-Hong Kong is customs territory and entity separate from the rest of China is able to enter international agreements on its own behalf in commercial and economic matters. the U.S. - Hong Kong Policy Act of 1992 is grounded in the dertermination to promote Hong Kong’s prosperity, autonomy, and way of life.
HONG KONG RESPECTS INTELLECTUAL PROPERTY RIGHTS
-Hong Kong has an established legal framework for the protection of intellectual property rights in patents, trademarks, copyright and registered designs. Hong Kongs intellectual property legal framework is fully compatible with our obligations under the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). -Hong Kong is committed to maintaining a robust intellectual property regime and its status as a responsible trading partner.
ECONOMIC AND TRADE OFFICES
Hong Kong has three Economic and Trade Offices in the US. They are situated in Washington DC, New York and San Francisco. They represent Hong Kong on matters related to economy and trade in the US, and help foster trade and commercial ties between Hong Kong and the US.
TEXTILE AND CLOTHING
-No quota is required for export of Hong Kong-origin or Mainland China-origin textile and clothing products to the US. -All textile and clothing products for import into the US market must identify the country where they were processed or manufactured. False labeling of imported articles is a violation of US laws and may be subject to enforcement action and/ or liquidated damages.
SECTION 421 SAFEGUARD - US TRANSITIONAL PRODUCT SPECIFIC SAFEGUARD
Mainland China’s Accession Protocol to the World Trade Organization (WTO) provides for “transitional product-specific safeguard”. Under the provision, WTO members may apply measures (including quantitative restrictions and/or tariffs) to limit imports of any Chinese products should they be imported in such increased quantities as to cause or threaten to cause market disruption to the domestic industries. The provision expired after 10 December 2013. In the US, China product-specific safeguard actions were provided for under Section 421 of the US Trade Act of 1974. Therefore, it was commonly known as “Section 421 safeguard”.
CLASSIFYING THE IMPORT
CHAPTER: 42 HEADING: 4202 SUBHEADING: 4202.21 TA R I F F I T E M : 4 2 0 2 . 2 1 . 9 0 0 0
COST SHEETS
pxru4471 FW 14/15
9”h x 10.5”w x 5”d
pxru5652 F/W 14?15
Cedar Street Maise
Crosshatched Leather
1.5
$8.00
$12.00
Classic Nappa lamb leather
Custom Woven Caroleena space dot lining
1
$2.30
$2.30
Custom woven quick & curious lining
Love Bird Wink Clutch
1
$10.00
$10.00
0.5
$2.00
$1.00
$14.30 short shoulder straps convertible cross-body strap zip top closure interior zip double side pockets kate spade gold embossed signature stud
2 1 1 1 1 1
$2.25 $1.80 $2.00 $2.00 $0.20 $0.40
$5.00 $1.80 $2.00 $2.00 $0.20 $0.40
$11.00 magnegtic snap interior side pocket double credit card side slide pockets kate spade gold embossed signature stud
1 1 1 1
$1.00 $0.20 $0.25 $0.40
$11.40
Top-stitching Sewing Thread
1 1 1 1 1 1 1
$0.85 $0.45 $2.00 $1.20 $0.25 $2.30 $1.15
$0.85 $0.45 $2.00 $1.20 $0.25 $2.30 $1.15
$1.00 $0.20 $0.25 $0.40
$1.85
Sewing Thread
1 1 1 1 1 1
$0.85 $0.45 $1.90 $1.20 $2.10 $1.05
$0.85 $0.45 $1.90 $1.20 $2.10 $1.05
1
$1.95
$1.95 $10.15
1
$1.95
$1.95
1 1
$0.10 $0.15
$0.10 $0.15
1 1
$0.10 $0.15
$9.50 $0.10 $0.15
1
$0.40
$0.40 $0.65 $36.50 $51.10 $14.60 $298.00 $246.90
1
$0.40
$0.40 $0.65 $23.00 $32.20 $9.20 $298.00 $265.80
5.5”h x 9.8”w x 0.8”d
SHIPPING ROUTE Part 1: Ocean Freight A. Type of box used: 5 ply cardboard carton B. Number of case packs (boxes): 161 C. Type of container: 20 standard dry freight container D. Space needed in container: 1,1043 Cubic feet Part 2: Air Freight N/A Part 3: Shipping Timeline Route: from Port Hong Kong to Port Long Beach, California Distance: 7,352 miles (11,832 km) Transit time: 19 days 21 hours Part 4: From Port Hong Kong to Port Long Beach
IMPORTER’S DOCUMENTS
FREIGHT CARRIER’S DOCUMENTS
M A N U FAC T U R E R ’ S D O C U M E N T S