What’s a Spade Worth?

Faltering sales at Kate Spade LLC (New York) have temporarily derailed the auction for the handbag maker, according to The New York Post.

The sale process has been put on hold pending an appraisal to determine what the company is currently worth.

The handbag maker attracted the interest of a number of large apparel firms soon after it was put up for sale in September 2005 by The Neiman Marcus Group (Dallas), its majority owner. Liz Claiborne Inc. (New York) and VF Corp. LLC (Fort Pierce, Fla.) were among those known to be vying for the brand, for as much as $130 million. But disappointing sales of Kate Spade merchandise and a reduced profit outlook led to disagreements over the company's valuation. In recent weeks, Citigroup Inc. (New York) was brought in to conduct an appraisal.

Ex-fashion editor Kate Spade founded the company with her husband Andy in 1993 and it quickly became a must-have for young urbanites during the minimalist 1990s. The company has since diversified into other categories, including shoes, apparel and home decor. It also lessened its dependence on department stores, developing a retail chain of its own, It currently operates 24 stores, including a Jack Spade store for men. Last year, the company said it planned to open 32 stores over the next three to five years.

Neiman Marcus bought a 56 percent stake in Kate Spade for $33.6 million in 1999. But the luxury retailer was itself acquired, by the private equity firms Texas Pacific Group and Warburg Pincus, in 2005.