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Catherine Holstein’s business pitch in 2014 was based on the idea that women’s needs were being neglected. Fashion was showmanship; it was marketing, she says, and that resulted in fragmented, frustrated shopping experiences. Her brand, Khaite, was born in 2016, with a line of don’t-call-them-basics in cotton, denim, leather and cashmere. Handbags came later, but Holstein soon realised she had a problem.
“I wasn’t carrying our handbags. I wasn’t reaching for them. And that is why I started this brand — to make clothes I would gravitate towards in the morning.”
While not a full relaunch, Khaite is introducing a new chapter for its handbags. It released a selection of new bags this month, including the Lotus, a re-release of an existing style, improved with a wider strap and more malleable design; the Simona, a sleek baguette; and the Zoe, the brand’s take on a quilted tote. Together, the pre-fall collection forms a new “family” of handbags, around which Holstein says future designs will be based.
US growth equity firm Stripes will invest an undisclosed amount in New York’s Khaite to fuel its next stage of growth.
What Holstein is working towards with the handbag drop is a shift in balance of the business’s makeup that for many is a marker of maturation. Already 45 per cent of the brand’s business, by next year, Holstein says, non-apparel will account for 55 per cent. The long-term goal is to have an 80-20 split between non-apparel (the brand also carries belts, sunglasses and shoes) and ready-to-wear. This means Khaite’s revenue divide will more closely mimic those of major fashion houses, who make the lion’s share of sales from covetable accessories.
Other shifts to the business have taken place behind the scenes. In March 2023, growth equity firm Stripes took a majority stake in the brand. At the same time, Stripes’s founder and partner Ken Fox asked Brigitte Kleine — a former president at Donna Karan, Alexander McQueen, Michael Kors and Tory Burch, an operating partner at Stripes and a board member at Khaite — to step in as CEO, taking the role over from Holstein, who also calls her a mentor since day one. Kleine, speaking for the first time in her new role, says she didn’t think she’d ever work in-house at a fashion brand again, until the Khaite job came along. “These opportunities are so rare. There is no opportunity like this in New York,” says Kleine.
“Brigitte is on the same page as me,” Holstein says. “I always knew I could get Khaite to a certain point. I know what I know and I know what I don t know: taxes, warehousing, logistics, real structural points. It’s not my expertise. So bringing somebody in that’s done that before was imperative to the growth and longevity of the brand.”
Longevity is everything for today’s independent designers facing a precarious market. Khaite has been pondered as the future of New York Fashion, identified as an emerging “It-brand” and clocked as the quintessential label for cool city girls ever since Katie Holmes hailed a cab wearing Khaite’s cashmere bra and sweater set in 2019. Already, Holstein has achieved what many new designers only hope to. She’s been named CFDA Womenswear Designer of the Year twice, in 2022 and 2023. Her New York runway shows have risen to the top of the schedule’s must-see list, at a time when other labels have shuttered or pared back business.
Now, with a big retail push underway and sights set on $250 million in sales as the next milestone, Khaite’s focus is more on staying power than potential. How do they plan to make it last?
Kleine says that the brand has spent the last 18 months “closing a lot of doors”: capping orders, pulling out of underperforming wholesale accounts to prioritise full-price sales. “We want to create a great business with growth, but we don’t want to ever feel like we’re sacrificing being true to what this brand should be. It’s all about profitability,” she says. The brand does not disclose whether or not it’s profitable or sales figures. She’s also hired across the wholesale, retail, merchandising, product development, finance, marketing, tech, production and design departments, and appointed new roles including a chief peoples officer, head of global wholesale, chief of staff and director of events.
Holstein, as she said, is on the same page. “I didn’t start a brand wanting to bend anybody’s mind or make them question their identity. It honestly wasn’t from what I think a lot of critics would say was an intellectual point of view, per se,” says Holstein. Sure, she’s on the fashion calendar, and critics reviews have been positive if sometimes mixed. “But it’s really important for me to stay true to the women that I’m serving and not get too attached to what a critic could say or what I’m doing for the front row. And I know what that is because it’s a feeling that I couldn’t ever really stray from.”
What women want
The Khaite woman — more than just a cool girl — is the brand’s guiding principle. It’s Catherine herself. “I am my greatest gauge. I was born this way,” she says, of her ability to know what her customer wants. Her team analyses business trends, metrics and data that helps guide product strategy, though Holstein says she doesn’t care so much what the numbers say. “I’m in the meetings. But I take it with a grain of salt.”
She thinks of her customer as a spectrum. With mostly prohibitive price points for younger consumers’ budgets, their entry point to the brand is probably the best-selling Benny belt (which starts at $580 and is heavily dupe-hunted on TikTok), or a pair of jeans. When asked about a potential beauty launch anytime soon — the relied upon move for luxury brands to pull the aspirational consumer — Holstein says that there’s opportunity there, but no immediate plans.
Older customers, meanwhile, are after her knitwear and outerwear, which is a standout seller for the brand’s wholesale partners, including Neiman Marcus, Bergdorf Goodman and Ssense.
What makes it sell is its wearability at a time when what real women want is sometimes lost in the messaging of what male designers believe is their fantasy version of what a woman would rather wear. Holstein doesn’t believe that there’s any shortage of female designers, namechecking Miuccia Prada, Phoebe Philo and Gabriela Hearst among the most notable. Rather, she feels she’s pushing back against a dumbing down of fashion basics — jeans, tees, sweaters, button-downs, a good dress — when they’re so essential to a wardrobe.
“[Catherine] has always been that designer that designs for herself,” says Julie Gilhart, the fashion advisor and consultant often credited with giving Holstein her first break when, as fashion director of Barneys, picked up her Parsons senior thesis collection of sailor dresses. “I think if she stays the course and doesn’t get too obsessed with doing more business than the previous year, she’s going to be great. The concern with the industry is this drive to do more than you did before, when maybe it’s just good to stay profitable.”
Beyond New York — or not
Holstein says the company’s “biggest branding moment” came when Khaite opened its first store in New York’s Soho neighbourhood last year. “It gave everybody context. I think before you have your own store, you are a designer, and then when you have your own store, and you can give the full breadth of what you’re trying to do, you really have a brand,” she says. “We worked really hard to make sure that the customer felt like they were stepping into a full world, that it didn’t feel like four walls and some racks.”
Another store is planned to open in Manhattan’s Upper East Side, and it’s currently running a pop-up in East Hampton. Khaite’s next challenge is introducing the brand to markets outside of its home base of New York. Stores are planned for Texas’s Highland Park Village and California’s South Coast Plaza. The stores are essential to building a real Khaite world, which Kleine says means cutting through the noise. Compared to her time at Tory Burch from 2005 to 2016, her most recent in-house role, the biggest change in running a fashion business today is the direct line to customers.
“Getting them into your world is so much more important now than it ever was,” Kleine says. “So I still believe in wholesale as an important component of our business, but as many brands are doing, we want to speak to the customer, we want to get closer to the customer. And we do that through retail and our brand.com.” One open position Kleine is recruiting for is a head of retail to lead the store strategy.
International expansion is also a focus for Kleine, who points out that 50 per cent of wholesale revenue is already in Europe, and the brand opened a store in Korea last year with another in the works, both in Seoul. But Holstein doesn’t plan on checking off a common box that New York designers pursue: a show in Paris. “I am not from Paris. Why would I go to Paris? It doesn’t make sense for me,” Holstein says on the matter — though the brand is opening a showroom there this winter.
She concedes her brand would be different if she had started it in Paris (and says that a European office is in the works, though the exact timing or location is TBD), but she believes being a New York brand has made it better. “New York is a city where you can make things happen.” But is there enough support for New York designers?
“I don’t want to sound unsympathetic. But everybody’s got to be responsible for themselves. I don’t think it’s fair if you blame everybody else because your business failed. I think failure is very important. I think failure is the best lesson you can ever have.” She’s not a stranger to it: Holstein’s first namesake brand shuttered amid the recession.
Maybe what it is about New York is that it keeps Holstein in a position of needing to prove herself. It’s a place where you have to demand attention, and the international fashion scene is more likely to count you out. That’s fuel to Holstein. “I probably shouldn’t say this, but I love not feeling good enough. It keeps me striving for more.”
It’s a concept she returns to as her parting thought, asked whether there’s anything else she’d like to talk about.
“I am in therapy about this: knowing when it’s OK to be happy. Ever since I had my son, being a mother and a business owner, all of these things have fallen into place and we’re now entering post-startup. We’re becoming a bigger brand and have more infrastructure. It has allowed for a lot more ease that I was not used to for the last eight years,” she says. “And unbeknownst to me, I did not know happiness was not easy to accept. So I think now these are the best years. I have full creative control. Everybody trusts me. The customer really is responding to the product. We’re growing really fast. We’re having a lot of fun. I’m just recognising that right now is a really good time.”
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