Kate Spade & Co (KATE) 10-Q 3 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jul. 02, 2016	Jul. 22, 2016
Document and Entity Information
Entity Registrant Name	Kate Spade & Co
Entity Central Index Key	352,363
Document Type	10-Q
Document Period End Date	Jul. 2, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		128,026,593
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jul. 02, 2016	Jan. 02, 2016	Jul. 04, 2015
Current Assets:
Cash and cash equivalents	$ 306,536	$ 297,851	$ 231,437
Accounts receivable - trade, net	64,440	96,850	65,300
Inventories, net	217,441	191,879	188,385
Deferred income taxes	2,933	1,855	551
Other current assets	33,236	32,390	35,680
Total current assets	624,586	620,825	521,353
Property and Equipment, Net	177,978	173,963	171,340
Goodwill	56,338	48,730	47,841
Intangibles, Net	86,058	86,288	87,237
Deferred Income Taxes	1,474	1,241	31
Other Assets	50,655	44,550	38,919
Total Assets	997,089	975,597	866,721
Current Liabilities:
Short-term borrowings	3,592	3,625	3,595
Accounts payable	105,942	109,327	101,671
Accrued expenses	115,465	151,680	132,287
Income taxes payable	2,293	1,655	2,632
Total current liabilities	227,292	266,287	240,185
Long-Term Debt	390,463	393,168	393,863
Other Non-Current Liabilities	52,151	52,021	50,948
Deferred Income Taxes	20,011	18,900	17,711
Commitments and Contingencies (Note 7)
Stockholders' Equity:
Preferred stock, $0.01 par value, authorized shares - 50,000,000, issued shares - none
Common stock, $1.00 par value, authorized shares - 250,000,000, issued shares - 176,437,234	176,437	176,437	176,437
Capital in excess of par value	240,833	224,677	211,856
Retained earnings	1,191,404	1,155,838	1,094,566
Accumulated other comprehensive loss	(22,379)	(30,041)	(32,930)
Total stockholders' equity, excluding treasury stock	1,586,295	1,526,911	1,449,929
Common stock in treasury, at cost — 48,410,641, 48,544,175 and 48,758,189 shares	(1,279,123)	(1,281,690)	(1,285,915)
Total stockholders’ equity	307,172	245,221	164,014
Total Liabilities and Stockholders’ Equity	$ 997,089	$ 975,597	$ 866,721

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jul. 02, 2016	Jan. 02, 2016	Jul. 04, 2015
CONDENSED CONSOLIDATED BALANCE SHEETS
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Preferred stock, authorized shares	50,000,000	50,000,000	50,000,000
Preferred stock, issued shares	0	0	0
Common stock, par value (in dollars per share)	$ 1	$ 1	$ 1
Common stock, authorized shares	250,000,000	250,000,000	250,000,000
Common stock, issued shares	176,437,234	176,437,234	176,437,234
Common stock in treasury, shares	48,410,641	48,544,175	48,758,189

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Net Sales	$ 319,691	$ 281,118	$ 594,113	$ 536,434
Cost of goods sold	128,985	109,640	233,926	210,229
Gross Profit	190,706	171,478	360,187	326,205
Selling, general & administrative expenses	156,651	153,932	308,419	345,785
Operating Income (Loss)	34,055	17,546	51,768	(19,580)
Other expense, net	(3,093)	(1,823)	(3,340)	(3,218)
Loss on settlement of note receivable				(9,873)
Interest expense, net	(4,937)	(5,344)	(9,933)	(8,708)
Income (Loss) Before Provision for Income Taxes	26,025	10,379	38,495	(41,379)
Provision for income taxes	1,466	1,130	3,020	2,931
Income (Loss) from Continuing Operations	24,559	9,249	35,475	(44,310)
Discontinued operations, net of income taxes	2,214	(708)	2,934	(2,370)
Net Income (Loss)	$ 26,773	$ 8,541	$ 38,409	$ (46,680)
Basic
Income (Loss) from Continuing Operations (in dollars per share)	$ 0.19	$ 0.07	$ 0.28	$ (0.35)
Net Income (Loss) (in dollars per share)	0.21	0.07	0.30	(0.37)
Diluted
Income (Loss) from Continuing Operations (in dollars per share)	0.19	0.07	0.28	(0.35)
Net Income (Loss) (in dollars per share)	$ 0.21	$ 0.07	$ 0.30	$ (0.37)
Weighted Average Shares, Basic (in shares)	128,000	127,663	127,966	127,576
Weighted Average Shares, Diluted (in shares)	129,140	128,431	128,888	127,576

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net Income (Loss)	$ 26,773	$ 8,541	$ 38,409	$ (46,680)
Other Comprehensive Income (Loss), Net of Income Taxes:
Cumulative translation adjustment, net of income taxes of $0	4,573	(1,867)	8,551	(2,214)
Write-off of translation adjustment in connection with liquidation of foreign subsidiaries	1,195		1,195
Change in fair value of cash flow hedging derivatives, net of income taxes of $(1,141), $(404), $(621) and $(5), respectively	(1,136)	(9)	(2,084)	(730)
Comprehensive Income (Loss)	$ 31,405	$ 6,665	$ 46,071	$ (49,624)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Cumulative translation adjustment, income taxes	$ 0	$ 0	$ 0	$ 0
Change in fair value of cash flow hedging derivatives, income taxes	$ (621)	$ (5)	$ (1,141)	$ (404)

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015
Cash Flows from Operating Activities:
Net income (loss)	$ 38,409	$ (46,680)
Adjustments to arrive at income (loss) from continuing operations	(2,934)	2,370
Income (loss) from continuing operations	35,475	(44,310)
Adjustments to reconcile income (loss) from continuing operations to net cash provided by (used in) operating activities:
Depreciation and amortization	23,908	24,240
Loss on asset disposals and impairments, including streamlining initiatives, net	844	8,309
Share-based compensation	16,156	12,756
Loss on settlement of note receivable		9,873
Foreign currency transaction (gains) losses, net	(5,354)	1,620
Equity losses of equity investees	3,248	2,754
Other, net	(135)	(186)
Changes in assets and liabilities:
Decrease in accounts receivable – trade, net	34,220	23,971
Increase in inventories, net	(20,254)	(39,140)
(Increase) decrease in other current and non-current assets	(1,725)	8,015
(Decrease) increase in accounts payable	(3,841)	14,362
Decrease in accrued expenses and other non-current liabilities	(34,434)	(14,210)
Net change in income tax assets and liabilities	1,834	1,684
Net cash used in operating activities of discontinued operations	(720)	(10,057)
Net cash provided by (used in) operating activities	49,222	(319)
Cash Flows from Investing Activities:
Proceeds from sales of property and equipment		816
Purchases of property and equipment	(25,200)	(28,163)
Proceeds from sales of joint venture interests, net	(2,350)	19,874
Investments in and advances to equity investees	(6,500)
Payment for joint venture interest		(10,000)
Payments for in-store merchandise shops	(807)	(2,094)
Net proceeds from settlement of note receivable		75,128
Purchase of trademarks	(1,200)
Other, net	(57)	368
Net cash provided by investing activities of discontinued operations		348
Net cash (used in) provided by investing activities	(36,114)	56,277
Cash Flows from Financing Activities:
Proceeds from borrowings under revolving credit agreement		2,000
Repayment of borrowings under revolving credit agreement		(8,000)
Repayment of Term Loan	(3,000)	(2,000)
Principal payments under capital lease obligations	(250)	(223)
Proceeds from exercise of stock options	258	2,428
Payment of deferred financing fees	(741)	(870)
Net cash used in financing activities	(3,733)	(6,665)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	(690)	(1,900)
Net Change in Cash and Cash Equivalents	8,685	47,393
Cash and Cash Equivalents at Beginning of Period	297,851	184,044
Cash and Cash Equivalents at End of Period	$ 306,536	$ 231,437

BASIS OF PRESENTATION

BASIS OF PRESENTATION	6 Months Ended
	Jul. 02, 2016
BASIS OF PRESENTATION
BASIS OF PRESENTATION	1. BASIS OF PRESENTATION The Condensed Consolidated Financial Statements of Kate Spade & Company and its wholly-owned and majority-owned subsidiaries (the “Company”) included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted from this report, as is permitted by such rules and regulations; however, the Company believes that its disclosures are adequate to make the information presented not misleading. It is suggested that these Condensed Consolidated Financial Statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2015 Annual Report on Form 10-K. Information presented as of January 2, 2016 is derived from audited financial statements. The Company operates its kate spade new york and JACK SPADE brands through one operating segment in North America and three operating segments internationally: Japan, Asia (excluding Japan) and Europe. The Company’s Adelington Design Group reportable segment is also an operating segment. The three reportable segments described below represent the Company’s activities for which separate financial information is available and which is utilized on a regular basis by the Company’s chief operating decision maker (“CODM”) to evaluate performance and allocate resources. In identifying the Company’s reportable segments, the Company considers its management structure and the economic characteristics, products, customers, sales growth potential and long-term profitability of its operating segments. As such, the Company configured its operations into the following three reportable segments: · KATE SPADE North America segment – consists of the Company’s kate spade new york and JACK SPADE brands in North America. · KATE SPADE International segment – consists of the Company’s kate spade new york and JACK SPADE brands in International markets (principally in Japan, Asia (excluding Japan), Europe and Latin America). · Adelington Design Group segment – consists of: (i) exclusive arrangements to supply jewelry for the LIZ CLAIBORNE and MONET brands and (ii) the licensed LIZWEAR and LIZ CLAIBORNE NEW YORK brands. In the opinion of management, the information furnished reflects all adjustments, all of which are of a normal recurring nature, necessary for a fair presentation of the results for the reported interim periods. Results of operations for interim periods are not necessarily indicative of results for the full year. Management has evaluated events or transactions that have occurred from the balance sheet date through the date the Company issued these financial statements. NATURE OF OPERATIONS Kate Spade & Company is engaged primarily in the design and marketing of a broad range of accessories and apparel. The Company’s fiscal year ends on the Saturday closest to December 31. The 2016 fiscal year, ending December 31, 2016, reflects a 52 -week period, resulting in a 13 -week, three-month period and a 26 -week, six-month period for the second quarter. The 2015 fiscal year, ending January 2, 2016, reflects a 52 -week period, resulting in a 13 -week, three-month period and a 26 -week, six-month period for the second quarter . PRINCIPLES OF CONSOLIDATION The Condensed Consolidated Financial Statements include the accounts of the Company. All inter-company balances and transactions have been eliminated in consolidation. USE OF ESTIMATES AND CRITICAL ACCOUNTING POLICIES The Company’s critical accounting policies are those that are most important to the portrayal of its financial condition and results of operations in conformity with US GAAP. These critical accounting policies are applied in a consistent manner throughout all periods presented. The Company’s critical accounting policies are summarized in Note 1 of Notes to Consolidated Financial Statements included in its Annual Report on Form 10-K for the fiscal year ended January 2, 2016. The application of critical accounting policies requires that the Company make estimates and assumptions about future events and apply judgments that affect the reported amounts of revenues and expenses. Estimates by their nature are based on judgments and available information. Therefore, actual results could materially differ from those estimates under different assumptions and conditions. The Company continues to monitor the critical accounting policies to ensure proper application of current rules and regulations. During the second quarter of 2016, there were no significant changes in the critical accounting policies discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended January 2, 2016. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS On January 3, 2016, the first day of the Company’s 2016 fiscal year, the Company retrospectively adopted new accounting guidance on debt issuance costs and reclassified the carrying value of its debt issuance costs related to term loans issued under its term loan credit agreement, which mature in April 2021 (collectively, the “Term Loan”) from an asset to a direct reduction of the liability. Accordingly, prior periods have been conformed to the current period’s presentation. As of July 2, 2016, January 2, 2016 and July 4, 2015, the aggregate carrying value of the debt issuance costs related to the Term Loan was $4.4 million, $4.8 million and $5.2 million, respectively. In November 2015, new accounting guidance on the balance sheet classification of deferred taxes was issued, which eliminates the current requirement to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. The guidance requires companies to classify all deferred tax assets and liabilities as noncurrent. This guidance is effective for interim and annual periods beginning on or after December 15, 2016, and early adoption is permitted. On July 3, 2016, the first day of the Company’s third fiscal quarter, the Company prospectively adopted this new accounting guidance. The Company will prospectively classify its existing deferred tax balances as noncurrent in future filings.

DISCONTINUED OPERATIONS AND DIS

DISCONTINUED OPERATIONS AND DISPOSALS	6 Months Ended
	Jul. 02, 2016
DISCONTINUED OPERATIONS AND DISPOSALS
DISCONTINUED OPERATIONS AND DISPOSALS	2. DISCONTINUED OPERATIONS AND DISPOSALS The Company completed the sale of Lucky Brand in February of 2014 and substantially completed the wind-down operations of the Juicy Couture business in the second quarter of 2014. The Company recorded pretax income (charges) of $1.5 million and $(1.5) million during the six months ended July 2, 2016 and July 4, 2015, respectively, and $0.3 million and $(0.8) million during the three months ended July 2, 2016 and July 4, 2015, respectively, to reflect the estimated difference between the carrying value of the net assets disposed and their estimated fair value, less costs to dispose, including transaction costs. Summarized results of discontinued operations are as follows: Six Months Ended Three Months Ended July 2, 2016 July 4, 2015 July 2, 2016 July 4, 2015 In thousands (26 Weeks) (26 Weeks) (13 Weeks) (13 Weeks) Net sales $ — $ $ — $ Income (loss) before provision for income taxes $ $ $ $ Provision for income taxes — — Income (loss) from discontinued operations, net of income taxes $ $ $ $ Gain (loss) on disposal of discontinued operations, net of income taxes $ $ $ $ Other On March 4, 2015, the Company and Lucky Brand Dungarees, LLC (“Lucky Brand LLC”) entered into a transfer and settlement agreement (the “Lucky Brand Note Agreement”) to settle the three -year $85.0 million note issued as part of the consideration for the sale of the Lucky Brand business (the “Lucky Brand Note”) in full, prior to its maturity. Pursuant to the terms of the Lucky Brand Note Agreement, Lucky Brand LLC paid the Company $81.0 million to settle the principal balance of the Lucky Brand Note and related unpaid interest. Giving effect to the Lucky Brand Note Agreement, since the date of issuance, the Company collected aggregate principal and interest under the Lucky Brand Note of $89.0 million. The transactions contemplated by the Lucky Brand Note Agreement closed on March 4, 2015, and the Company recognized a $9.9 million loss on the settlement of the Lucky Brand Note in the first quarter of 2015. The Company completed substantially all of the closures of its KATE SPADE SATURDAY operations and JACK SPADE retail stores in the second quarter of 2015. Although such dispositions were individually significant, they did not represent a strategic shift in the Company's operations and were not reflected as discontinued operations. The Company recorded pretax losses of $17.6 million and $1.8 million during the six and three months ended July 4, 2015, respectively, related to the KATE SPADE SATURDAY and JACK SPADE retail stores that were substantially disposed in the second quarter of 2015.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	6 Months Ended
	Jul. 02, 2016
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY	3. STOCKHOLDERS’ EQUITY Activity for the six months ended July 2, 2016 in the Capital in excess of par value, Retained earnings and Common stock in treasury, at cost accounts was as follows: Common Stock Capital in Excess Retained in Treasury, In thousands of Par Value Earnings at Cost Balance as of January 2, 2016 $ $ $ Net income — — Exercise of stock options — Restricted shares issued, net of cancellations and shares withheld for taxes — Share-based compensation — — Balance as of July 2, 2016 $ $ $ Activity for the six months ended July 4, 2015 in the Capital in excess of par value, Retained earnings and Common stock in treasury, at cost accounts was as follows: Common Stock Capital in Excess Retained in Treasury, In thousands of Par Value Earnings at Cost Balance as of January 3, 2015 $ $ $ Net loss — — Exercise of stock options — Restricted shares issued, net of cancellations and shares withheld for taxes — Share-based compensation — — Balance as of July 4, 2015 $ $ $ Accumulated other comprehensive (loss) income consisted of the following: In thousands July 2, 2016 January 2, 2016 July 4, 2015 Cumulative translation adjustment, net of income taxes of $0 $ $ $ Unrealized (losses) gains on cash flow hedging derivatives, net of income taxes of $(1,133) , $8 and $764 , respectively Accumulated other comprehensive loss, net of income taxes $ $ $ The following table presents the change in each component of Accumulated other comprehensive (loss) income, net of income taxes for the six months ended July 2, 2016: Unrealized Gains Cumulative (Losses) on Cash Translation Flow Hedging In thousands Adjustment Derivatives Balance as of January 2, 2016 $ $ Other comprehensive income (loss) before reclassification Amounts reclassified from accumulated other comprehensive (loss) income Net current-period other comprehensive income (loss) Balance as of July 2, 2016 $ $ The following table presents the change in each component of Accumulated other comprehensive (loss) income, net of income taxes for the six months ended July 4, 2015: Unrealized Gains Cumulative (Losses) on Cash Translation Flow Hedging In thousands Adjustment Derivatives Balance as of January 3, 2015 $ $ Other comprehensive loss before reclassification Amounts reclassified from accumulated other comprehensive income — Net current-period other comprehensive loss Balance as of July 4, 2015 $ $ The following table presents the change in each component of Accumulated other comprehensive loss, net of income taxes for the three months ended July 2, 2016: Unrealized Cumulative Losses on Cash Translation Flow Hedging In thousands Adjustment Derivatives Balance as of April 2, 2016 $ $ Other comprehensive income (loss) before reclassification Amounts reclassified from accumulated other comprehensive (loss) income Net current-period other comprehensive income (loss) Balance as of July 2, 2016 $ $ The following table presents the change in each component of Accumulated other comprehensive (loss) income, net of income taxes for the three months ended July 4, 2015: Unrealized Gains Cumulative (Losses) on Cash Translation Flow Hedging In thousands Adjustment Derivatives Balance as of April 4, 2015 $ $ Other comprehensive loss before reclassification Amounts reclassified from accumulated other comprehensive income — Net current-period other comprehensive loss Balance as of July 4, 2015 $ $

INCOME TAXES

INCOME TAXES	6 Months Ended
	Jul. 02, 2016
INCOME TAXES
INCOME TAXES	4. INCOME TAXES During the second quarter of 2016 and 2015, the Company continued to record a full valuation allowance on deferred tax assets in most jurisdictions due to the combination of its history of pretax losses and its inability to carry back tax losses or credits. The Company’s provision for income taxes for the six and three months ended July 2, 2016 and July 4, 2015 primarily represented increases in deferred tax liabilities for indefinite-lived intangible assets, current tax on operations in certain jurisdictions and an increase in the accrual for interest related to uncertain tax positions. The number of years with open tax audits varies depending upon the tax jurisdiction. The major tax jurisdictions include the US, Japan, United Kingdom and Canada. The Company is no longer subject to US Federal examination by the Internal Revenue Service (“IRS”) for the years before 2013 and, with a few exceptions, this applies to tax examinations by state authorities as well. Although the years before 2013 are considered to be closed, the IRS and other taxing authorities can also subject the Company’s net operating loss carryforwards to further review when such net operating loss carryforwards are utilized. The Company expects a reduction in the liability for unrecognized tax benefits, inclusive of interest and penalties, by an amount between $0.7 million and $3.7 million within the next 12 months due to either settlement or the expiration of the statute of limitations. As of July 2, 2016, uncertain tax positions of $9.3 million existed, which would provide an effective rate impact in the future if subsequently recognized.

DEBT AND LINES OF CREDIT

DEBT AND LINES OF CREDIT	6 Months Ended
	Jul. 02, 2016
DEBT AND LINES OF CREDIT
DEBT AND LINES OF CREDIT	5. DEBT AND LINES OF CREDIT Long-term debt consisted of the following: In thousands July 2, 2016 January 2, 2016 July 4, 2015 Term Loan credit facility, due April 2021 (a) $ $ $ Revolving credit facility — — — Capital lease obligations Total debt Less: Short-term borrowings (b) Long-term debt $ $ $ (a) The balance as of July 2, 2016, January 2, 2016 and July 4, 2015 included aggregate unamortized debt discount and deferred financing fees of $5.8 million, $6.3 million and $6.9 million, respectively. (b) At July 2, 2016, January 2, 2016 and July 4, 2015, the balance consisted of Term Loan amortization payments and obligations under capital leases. Term Loan On April 10, 2014, the Company entered into a term loan credit agreement (the “Term Loan Credit Agreement”), which provides for the Term Loan in an aggregate principal amount of $400.0 million, maturing in April 2021. The Term Loan is subject to amortization payments of $1.0 million per quarter, which commenced on October 1, 2014, with the balance due at maturity. Interest on the outstanding principal amount of the Term Loan accrues at a rate equal to LIBOR (with a floor of 1.0%) plus 3.0% per annum, payable in cash. The Term Loan and other obligations under the Term Loan Credit Agreement are guaranteed by all of the Company’s existing material domestic restricted subsidiaries. The Term Loan Credit Agreement provides for incremental future term loans and other pari passu lien indebtedness, subject to an overall limit of $100.0 million plus such additional amount that would cause the Company’s consolidated net total secured debt ratio not to exceed 3.75 to 1.0 on a pro forma basis. The Term Loan is secured (i) on a first-priority basis by a lien on the Company’s KATE SPADE trademarks and certain related rights owned by the Company and the Guarantors (the “Term Priority Collateral”) and (ii) by a second-priority security interest in the Company’s and the Guarantors’ other assets (the “ABL Priority Collateral” and together with the Term Priority Collateral, the “Collateral”), which secure the Company’s amended and restated revolving credit facility (as amended to date, the “ABL Facility”) on a first-priority basis. The Term Loan is subject to prepayment from the Company’s Excess Cash Flow (subject to reduction based on the Company’s net debt ratio). ABL Facility The Company’s ABL Facility was entered into on May 16, 2014 and matures in May 2019. Availability under the ABL Facility is the lesser of $200.0 million and a borrowing base consisting of a percentage of eligible cash, accounts receivable and inventory. The ABL Facility also includes a swingline subfacility of $30.0 million, a multicurrency subfacility of $35.0 million and the option to expand the facility by up to $100.0 million under certain specified conditions. A portion of the ABL Facility up to $125.0 million is available for the issuance of letters of credit, and standby letters of credit may not exceed $40.0 million in the aggregate. The ABL Facility allows two borrowing options: one borrowing option with interest rates based on euro currency rates and a second borrowing option with interest rates based on the alternate base rate, as defined in the ABL Facility, with a spread based on the aggregate availability under the ABL Facility. The ABL Facility is guaranteed by substantially all of the Company’s current domestic subsidiaries and certain of the Company’s foreign subsidiaries. The ABL Facility is secured by a first-priority lien on the ABL Priority Collateral and a second-priority lien on the Term Priority Collateral. The agreement governing the ABL Facility requires the Company to maintain pro forma compliance with a fixed charge coverage ratio of 1.0 :1.0 on a trailing four -quarter basis if availability under the ABL Facility for three consecutive business days falls below the greater of $15.0 million and 10.0% of the lesser of the aggregate commitments and the borrowing base. The agreement governing the ABL Facility also requires the Company to apply substantially all cash collections to reduce outstanding borrowings under the ABL Facility if availability under the ABL Facility for three consecutive business days falls below the greater of $20.0 million and 12.5% of the lesser of the aggregate commitments and the borrowing base. As of July 2, 2016, availability under the Company’s ABL Facility was as follows: Total Borrowing Outstanding Letters of Available Excess In thousands Facility (a) Base (a) Borrowings Credit Issued Capacity Capacity (b) ABL Facility (a) $ $ $ — $ $ $ (a) Availability under the ABL Facility is the lesser of $200.0 million or a borrowing base that is computed monthly and comprised of the Company’s eligible cash, accounts receivable and inventory. (b) Excess capacity represents available capacity reduced by the minimum required aggregate borrowing availability under the ABL Facility of $20.0 million.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	6 Months Ended
	Jul. 02, 2016
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS	6. FAIR VALUE MEASUREMENTS The Company utilizes the following three level hierarchy that defines the assumptions used to measure certain assets and liabilities at fair value: Level 1 – Quoted market prices in active markets for identical assets or liabilities; Level 2 – Inputs other than Level 1 inputs that are either directly or indirectly observable; and Level 3 – Unobservable inputs developed using estimates and assumptions developed by the Company, which reflect those that a market participant would use. The following table presents the financial assets and liabilities the Company measured at fair value on a recurring basis, based on the fair value hierarchy: Level 2 In thousands July 2, 2016 January 2, 2016 July 4, 2015 Financial Assets: Derivatives $ $ $ Financial Liabilities: Derivatives $ $ $ The fair values of the Company’s Level 2 derivative instruments were primarily based on observable forward exchange rates. Unobservable quantitative inputs used in the valuation of the Company’s derivative instruments included volatilities, discount rates and estimated credit losses. The following table presents the non-financial assets the Company measured at fair value on a non-recurring basis in 2015, based on such fair value hierarchy: Total Losses Net Carrying Fair Value Measured and Recorded at Six Months Three Months Value as of Reporting Date Using: Ended Ended In thousands July 4, 2015 Level 1 Level 2 Level 3 July 4, 2015 July 4, 2015 Property and equipment $ — $ — $ — $ — $ $ As a result of the Company’s decision to close all KATE SPADE SATURDAY retail operations and JACK SPADE retail stores (see Note 2 – Discontinued Operations and Disposals and Note 8 – Streamlining Initiatives) and no longer directly operate its Company-owned stores in Brazil (see Note 8 – Streamlining Initiatives), the Company determined that a portion of the carrying values of such assets exceeded their fair values, resulting in impairment charges, which were recorded in Selling, general & administrative expenses (“SG&A”) on the accompanying Condensed Consolidated Statement of Operations. The fair values of the Company’s Level 3 Property and equipment are based on either a market approach or an income approach using the Company’s forecasted cash flows over the estimated useful lives of such assets, as appropriate. The fair values and carrying values of the Company’s debt instruments are detailed as follows: July 2, 2016 January 2, 2016 July 4, 2015 Carrying Carrying Carrying In thousands Fair Value Value Fair Value Value Fair Value Value Term Loan credit facility, due April 2021 (a) $ $ $ $ $ $ ABL Facility (b) — — — — — — (a) Carrying values include aggregate unamortized debt discount and deferred financing fees. (b) Borrowings under the ABL Facility bear interest based on market rate; accordingly its fair value approximates its carrying value. The fair values of the Company’s debt instruments were estimated using market observable inputs, including quoted prices in active markets, market indices and interest rate measurements. Within the hierarchy of fair value measurements, these are Level 2 fair values. The fair values of cash and cash equivalents, receivables and accounts payable approximate their carrying values due to the short-term nature of these instruments.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jul. 02, 2016
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	7. COMMITMENTS AND CONTINGENCIES Buying/Sourcing Pursuant to a buying/sourcing agency agreement, Li & Fung Limited (“Li & Fung”) acts as a global buying/sourcing agent. On March 24, 2015, the Company modified its existing arrangement in order to, among other things, transition the buying/sourcing activities for the Company’s accessories products to an in-house model, beginning with the Spring 2016 collection. The modifications included a reduction of the annual minimum value of inventory purchases and a change in the commission rates for certain products. The Company pays Li & Fung an agency commission based on the cost of product purchases through Li & Fung. The Company is obligated to use Li & Fung as the primary buying/sourcing agent for ready-to-wear apparel products and the Company may use Li & Fung as a buying/sourcing agent with respect to accessories products, with all such product purchases applying toward a minimum volume commitment of inventory purchases each year through the expiration of the term of the agreement on March 31, 2018. The Company’s agreement with Li & Fung is not exclusive. Leases In connection with the disposition of the Lucky Brand business, LIZ CLAIBORNE Canada retail stores, the LIZ CLAIBORNE branded outlet stores in the US and Puerto Rico and certain Mexx Canada retail stores, an aggregate of 277 store leases were assigned to or assumed by third parties, for which the Company or certain subsidiaries of the Company may remain secondarily liable for the remaining obligations on 113 such leases. As of July 2, 2016, the future aggregate payments under these leases amounted to $82.2 million and extended to various dates through 2025. During the second quarter of 2013, the Company entered into a sale-leaseback agreement for its North Bergen, NJ office with a 12 -year term and two five -year renewal options. This leaseback was classified as a capital lease and recorded at fair value. As of July 2, 2016, the estimated future minimum lease payments under the noncancelable capital lease were as follows: In thousands 2016 $ 2017 2018 2019 2020 Thereafter Total Less: Amounts representing interest and executory costs Net present values Less: Capital lease obligations included in short-term debt Long-term capital lease obligations $ Other The Company is a party to several pending legal proceedings and claims. Although the outcome of any such actions cannot be determined with certainty, management is of the opinion that the final outcome of any of these actions should not have a material adverse effect on the Company’s financial position, results of operations, liquidity or cash flows.

STREAMLINING INITIATIVES

STREAMLINING INITIATIVES	6 Months Ended
	Jul. 02, 2016
STREAMLINING INITIATIVES
STREAMLINING INITIATIVES	8. STREAMLINING INITIATIVES In the second quarter of 2015, the Company announced that it signed a distribution agreement for its operations in Latin America, including in Brazil. As part of these actions, the Company completed the closure of its Company-operated stores during the third quarter of 2015 and no longer operates directly in Brazil. The Company recorded charges related to contract terminations, severance, non-cash asset impairment charges and other costs related to these actions. This initiative did not represent a strategic shift and therefore was not presented as discontinued operations. On January 29, 2015, the Company announced that it is focusing its business on kate spade new york. As part of this business model, the Company discontinued KATE SPADE SATURDAY as a standalone business. The Company also announced a new business model for JACK SPADE to leverage the distribution network of its retail partners and expand its e-commerce platform. As part of these actions, KATE SPADE SATURDAY’s Company-owned and three partnered store locations were substantially closed by the end of the second quarter of 2015. The Company also completed the closure of JACK SPADE’s Company-owned stores. These actions resulted in restructuring charges related to contract assignment and termination costs, severance and non-cash asset impairment charges and were substantially completed in the second quarter of 2015. As a result of the closure of the Company’s former New York office as well as a reduction of office space in the Company’s office in North Bergen, NJ, the Company recorded charges related to asset impairment, contract terminations and other charges in 2014 and 2015. The Company expects to pay approximately $1.9 million of accrued streamlining costs in the next 12 months. The Company does not expect any significant restructuring charges. For the six months ended July 2, 2016, there were no charges incurred associated with the Company’s streamlining initiatives. For the six months ended July 4, 2015, the Company recorded pretax charges of $26.0 million related to these initiatives, including $11.2 million of payroll and related costs, $7.4 million of asset write-downs, $6.7 million of contract termination costs and $0.7 million of other costs. Approximately $7.6 million of these charges were non-cash during the six months ended July 4, 2015. For the six and three months ended July 4, 2015, expenses associated with the Company’s streamlining actions were primarily recorded in SG&A on the accompanying Condensed Consolidated Statements of Operations and impacted reportable segments and Other as follows: Six Months Ended Three Months Ended July 4, 2015 July 4, 2015 In thousands (26 Weeks) (13 Weeks) KATE SPADE North America $ $ KATE SPADE International Adelington Design Group Other (a) Total $ $ (a) Other consists of unallocated corporate restructuring costs. A summary rollforward of the liability for streamlining initiatives is as follows: Contract Payroll and Termination In thousands Related Costs Costs Other Costs Total Balance at January 2, 2016 $ $ $ $ 2016 spending Balance at July 2, 2016 $ $ $ $

EARNINGS PER COMMON SHARE

EARNINGS PER COMMON SHARE	6 Months Ended
	Jul. 02, 2016
EARNINGS PER COMMON SHARE:
EARNINGS PER COMMON SHARE	9. EARNINGS PER COMMON SHARE The following table sets forth the computation of basic and diluted earnings per common share (“EPS”). Six Months Ended Three Months Ended July 2, 2016 July 4, 2015 July 2, 2016 July 4, 2015 In thousands, except per share data (26 Weeks) (26 Weeks) (13 Weeks) (13 Weeks) Income (loss) from continuing operations $ $ $ $ Income (loss) from discontinued operations, net of income taxes Net income (loss) $ $ $ $ Basic weighted average shares outstanding Stock options and nonvested shares (a) — Diluted weighted average shares outstanding Earnings (loss) per share: Basic Income (loss) from continuing operations $ $ $ $ Income (loss) from discontinued operations $ $ $ $ — Net income (loss) $ $ $ $ Diluted Income (loss) from continuing operations $ $ $ $ Income (loss) from discontinued operations $ $ $ $ — Net income (loss) $ $ $ $ (a) Because the Company incurred a loss from continuing operations for the six months ended July 4, 2015, approximately 1.0 million outstanding stock options and approximately 2.0 million outstanding nonvested shares were considered antidilutive for such period, and excluded from the computation of diluted loss per share .

ADDITIONAL FINANCIAL INFORMATIO

ADDITIONAL FINANCIAL INFORMATION	6 Months Ended
	Jul. 02, 2016
ADDITIONAL FINANCIAL INFORMATION
ADDITIONAL FINANCIAL INFORMATION	10. ADDITIONAL FINANCIAL INFORMATION Condensed Consolidated Statements of Cash Flows Supplementary Disclosures During the six months ended July 2, 2016 and July 4, 2015, net income tax payments were $1.2 million. During the six months ended July 2, 2016 and July 4, 2015, the Company made interest payments of $12.5 million and $8.6 million, respectively. The Company received interest payments of $9.4 million for the six months ended July 4, 2015, including outstanding interest and payment in kind under the Lucky Brand Note. As of July 2, 2016, January 2, 2016 and July 4, 2015, the Company accrued capital expenditures totaling $5.4 million, $8.1 million and $6.9 million, respectively. Related Party Transactions In the first quarter of 2015, the Company and Walton Brown, a subsidiary of The Lane Crawford Joyce Group (“LCJG”), formed two joint ventures focused on growing the Company’s business in Greater China. Following the formation of the joint ventures, both Kate Spade Hong Kong, Limited, a wholly-owned subsidiary of the Company, and Walton Brown each own 50.0% of the shares of KS China Co., Limited (“ KSC ”) and KS HMT Co., Limited (“ KS HMT ”), the holding company for the KATE SPADE businesses in Hong Kong, Macau and Taiwan. With an equal partnership structure, the Company and Walton Brown actively manage the businesses together. The joint ventures each have an initial term of 10 years. To effectuate the new joint ventures, (i) the Company acquired a 60.0% interest in KSC (in which the Company already owned a 40.0% interest) from E-Land Fashion China Holdings Limited (“E-Land”), its former partner in China, for an aggregate payment of $36.0 million, comprised of $10.0 million to acquire E-Land’s interest in KSC and $26.0 million to terminate related contracts and (ii) the Company received a net $17.4 million from LCJG for their 50.0% interests in the joint ventures, subject to adjustments. As a result, the Company no longer consolidates the operations for the businesses in Hong Kong, Macau and Taiwan, which it acquired on February 5, 2014 and had net sales of approximately $6.4 million in 2015, through the transaction date. Upon closing of the KS HMT joint venture, $16.0 million of goodwill related to the KATE SPADE businesses in Hong Kong, Macau and Taiwan and $14.0 million of net assets of KS HMT were reclassified to Investment in unconsolidated subsidiaries, which was included in Other Assets on the accompanying Condensed Consolidated Balance Sheets. The Company concluded the carrying values of the assets and liabilities for Hong Kong, Macau and Taiwan approximated fair value, due in part to the recent acquisition of those territories from Globalluxe Kate Spade HK Limited. Accordingly, no gain or loss was recorded on the formation of KS HMT. The $26.0 million charge incurred in the first quarter of 2015 to terminate contracts associated with the KSC joint venture is recorded in SG&A on the accompanying Condensed Consolidated Statement of Operations. The Company accounts for its investments in the joint ventures under the equity method of accounting. The Company’s equity in losses of its equity investees was $3.2 million and $2.8 million during the six months ended July 2, 2016 and July 4, 2015, respectively, and $2.0 million for the three months ended July 2, 2016 and July 4, 2015. During the third quarter of 2015, the Company and Walton Brown each loaned $5.0 million to KSC. During the first quarter of 2016, the Company and Walton Brown each made additional loans of $0.7 million to KSC and $5.8 million to KS HMT . As of July 2, 2016, January 2, 2016 and July 4, 2015, the Company recorded $33.8 million, $28.1 million and $24.6 million, respectively, related to its Investments in and advances to unconsolidated subsidiaries, which was included in Other assets on the accompanying Condensed Consolidated Balance Sheets.

SEGMENT REPORTING

SEGMENT REPORTING	6 Months Ended
	Jul. 02, 2016
SEGMENT REPORTING
SEGMENT REPORTING	11. SEGMENT REPORTING The Company operates its kate spade new york and JACK SPADE brands through one operating segment in North America and three operating segments internationally: Japan, Asia (excluding Japan) and Europe. The Company’s Adelington Design Group reportable segment is also an operating segment. The three reportable segments described below represent the Company’s activities for which separate financial information is available and which is utilized on a regular basis by the Company’s CODM to evaluate performance and allocate resources. In identifying the Company’s reportable segments, the Company considers its management structure and the economic characteristics, products, customers, sales growth potential and long-term profitability of its operating segments. As such, the Company configured its operations into the following three reportable segments: · KATE SPADE North America segment – consists of the Company’s kate spade new york and JACK SPADE brands in North America. · KATE SPADE International segment – consists of the Company’s kate spade new york and JACK SPADE brands in International markets (principally in Japan, Asia (excluding Japan), Europe and Latin America ). · Adelington Design Group segment – consists of: (i) exclusive arrangements to supply jewelry for the LIZ CLAIBORNE and MONET brands and (ii) the licensed LIZWEAR and LIZ CLAIBORNE NEW YORK brands. The Company’s Chief Executive Officer has been identified as the CODM. The Company’s measure of segment profitability is Adjusted EBITDA of each reportable segment. Accordingly, the CODM evaluates performance and allocates resources based primarily on Segment Adjusted EBITDA. Segment Adjusted EBITDA excludes: (i) depreciation and amortization; (ii) charges due to streamlining initiatives, brand-exiting activities and acquisition related costs; (iii) losses on asset disposals and impairments; and (iv) the $26.0 million charge incurred in the first quarter of 2015 to terminate contracts with the Company’s former joint venture partner in China. The costs of all corporate departments that serve the respective segment are fully allocated. The Company does not allocate amounts reported below Operating income (loss) to its reportable segments, other than adjusted equity loss in equity method investees. The Company’s definition of Segment Adjusted EBITDA may not be comparable to similarly titled measures of other companies. The accounting policies of the Company’s reportable segments are the same as those described in Note 1 – Basis of Presentation. Sales are reported based on a destination basis. The Company, as licensor, also licenses to third parties the right to produce and market products bearing certain Company-owned trademarks; the resulting royalty income is included within the results of the associated segment. Adjusted Dollars in thousands Net Sales % to Total EBITDA % of Sales Six Months Ended July 2, 2016 (26 Weeks) KATE SPADE North America $ $ % KATE SPADE International % Adelington Design Group % Totals $ Six Months Ended July 4, 2015 (26 Weeks) KATE SPADE North America $ $ % KATE SPADE International % Adelington Design Group % Totals $ Three Months Ended July 2, 2016 (13 Weeks) KATE SPADE North America $ $ % KATE SPADE International % Adelington Design Group % Totals $ Three Months Ended July 4, 2015 (13 Weeks) KATE SPADE North America $ $ % KATE SPADE International % Adelington Design Group % Totals $ The following tables provide a reconciliation to Net Income (Loss): Six Months Ended Three Months Ended July 2, 2016 July 4, 2015 July 2, 2016 July 4, 2015 In thousands (26 Weeks) (26 Weeks) (13 Weeks) (13 Weeks) Reportable Segments Adjusted EBITDA: KATE SPADE North America $ $ $ $ KATE SPADE International (a) Adelington Design Group Total Reportable Segments Adjusted EBITDA Depreciation and amortization, net (b) Charges due to streamlining initiatives (c) , brand-exiting activities, acquisition related costs and loss on asset disposals and impairments, net Joint venture contract termination fee — — — Share-based compensation (d) Adjusted equity loss included in Reportable Segments Adjusted EBITDA (e) Operating Income (Loss) Other expense, net (a) Loss on settlement of note receivable — — — Interest expense, net Provision for income taxes Discontinued operations, net of income taxes Net Income (Loss) $ $ $ $ (a) Amounts include equity in the adjusted losses of the Company’s equity method investees of $3.2 million and $2.7 million for the six months ended July 2, 2016 and July 4, 2015, respectively and $2.0 million and $1.9 million for the three months ended July 2, 2016 and July 4, 2015, respectively. (b) Ex cludes amortization included in Interest expense, net. (c) See Note 8 – Streamlining Initiatives for a discussion of streamlining charges . (d) Includes share-based compensation expense of $0.2 million in the six months ended July 4, 2015, that was classified as restructuring. (e) Excludes $0.1 million of joint venture restructuring expense included in equity losses in the six and three months ended July 4, 2015. GEOGRAPHIC DATA: Dollars in thousands Net Sales % to Total Six Months Ended July 2, 2016 (26 Weeks) Domestic $ % International % Total $ % Six Months Ended July 4, 2015 (26 Weeks) Domestic $ % International % Total $ % Three Months Ended July 2, 2016 (13 Weeks) Domestic $ % International % Total $ % Three Months Ended July 4, 2015 (13 Weeks) Domestic $ % International % Total $ % There were no significant changes in segment assets during the six months ended July 2, 2016.

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS	6 Months Ended
	Jul. 02, 2016
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS	12. DERIVATIVE INSTRUMENTS In order to reduce exposures related to changes in foreign currency exchange rates, the Company uses forward contracts and options and may utilize foreign currency collars and swap contracts for the purpose of hedging the specific exposure to variability in forecasted cash flows associated primarily with inventory purchases mainly by its business in Japan. As of July 2, 2016, the Company had forward contracts maturing through September 2017 to sell 2.1 billion yen for $19.2 million. The Company also had option contracts maturing through December 2016 to sell 1.3 billion yen for $11.6 million. The Company uses foreign currency forward contracts outside the cash flow hedging program to manage currency risk associated with intercompany loans. As of July 2, 2016, the Company had forward contracts to sell 5.1 billion yen for $49.0 million maturing through September 2016. Transaction (losses) gains of $(6.2) million and $0.7 million related to these derivative instruments were reflected within Other expense, net for the six months ended July 2, 2016 and July 4, 2015, respectively, and $(3.1) million and $1.1 million for the three months ended July 2, 2106 and July 4, 2015, respectively. The following table summarizes the fair value and presentation in the Condensed Consolidated Financial Statements for derivatives designated as hedging instruments and derivatives not designated as hedging instruments: Foreign Currency Contracts Designated as Hedging Instruments In thousands Asset Derivatives Liability Derivatives Balance Sheet Notional Balance Sheet Notional Period Location Amount Fair Value Location Amount Fair Value July 2, 2016 Other current assets $ 11,637 $ Accrued expenses $ $ January 2, 2016 Other current assets Accrued expenses — — July 4, 2015 Other current assets Accrued expenses Foreign Currency Contracts Not Designated as Hedging Instruments In thousands Asset Derivatives Liability Derivatives Balance Sheet Notional Balance Sheet Notional Period Location Amount Fair Value Location Amount Fair Value July 2, 2016 Other current assets $ — $ — Accrued expenses $ $ January 2, 2016 Other current assets — — Accrued expenses July 4, 2015 Other current assets — — Accrued expenses The following table summarizes the effect of foreign currency exchange contracts designated as hedging instruments on the Condensed Consolidated Financial Statements: Location of Gain or Amount of Gain or (Loss) Reclassified Amount of Gain or Amount of Gain or (Loss) Recognized from Accumulated (Loss) Reclassified (Loss) Recognized in in Accumulated OCI into Operations from Accumulated Operations on OCI on Derivative (Effective and OCI into Operations Derivative In thousands (Effective Portion) Ineffective Portion) (Effective Portion) (Ineffective Portion) Six Months Ended July 2, 2016 (26 Weeks) $ Cost of goods sold $ $ — Six Months Ended July 4, 2015 (26 Weeks) Cost of goods sold — Three Months Ended July 2, 2016 (13 Weeks) Cost of goods sold — Three Months Ended July 4, 2015 (13 Weeks) Cost of goods sold —

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION	6 Months Ended
	Jul. 02, 2016
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION	13. SHARE-BASED COMPENSATION The Company recognizes the cost of all employee share-based awards on a straight-line attribution basis over their respective vesting periods, net of estimated forfeitures. The Company issues stock options, restricted shares, restricted share units and shares with performance features to employees under share-based compensation plans. Stock options are issued at the current market price, have a three -year vesting period and a contractual term of 7 years. Compensation expense for restricted shares, including shares with performance features, is measured at fair value on the date of grant based on the number of shares granted and the quoted market price of the Company’s common stock. Such value is recognized as expense over the vesting period of the award, net of estimated forfeitures. Compensation expense for restricted share units with performance features and a market condition is measured at fair value, subject to the market condition on the date of grant and based on the number of shares expected to vest subject to the performance condition. Such value is recognized as expense over the vesting period of the award, net of estimated forfeitures. Compensation expense related to the Company’s share-based payment awards totaled $16.2 million and $12.8 million for the six months ended July 2, 2016 and July 4, 2015, respectively, and $8.2 million and $6.8 million for the three months ended July 2, 2016 and July 4, 2015, respectively. Compensation expense for the six months ended July 4, 2015 included $0.2 million that was classified as restructuring . Stock Options The Company grants stock options to certain domestic and international employees. These options are subject to transfer restrictions and risk of forfeiture until earned by continuing employment. Stock options are issued at the current market price and have a three -year vesting period and a contractual term of 7 years. The Company utilizes the Trinomial lattice pricing model to estimate the fair value of options granted. The Company believes this model provides the best estimate of fair value due to its ability to incorporate inputs that change over time, such as volatility and interest rates and to allow for actual exercise behavior of option holders. Six Months Ended Valuation Assumptions: July 4, 2015 Weighted-average fair value of options granted $ 15.92 Expected volatility 76.5% Weighted-average volatility 58.7% Expected term (in years) 4.2 Dividend yield - Risk-free rate 1.9% Expected annual forfeiture 15.3% Expected volatilities are based on a term structure of implied volatility, which assumes changes in volatility over the life of an option. The Company utilizes historical optionee behavioral data to estimate the option exercise and termination rates that are used in the valuation model. The expected term represents an estimate of the period of time options are expected to remain outstanding. The expected term provided in the above table represents an option weighted-average expected term based on the estimated behavior of distinct groups of employees who received options in 2015. The range of risk-free rates is based on a forward curve of interest rates at the time of option grant. A summary of award activity under stock option plans as of July 2, 2016 and changes therein during the six month period then ended are as follows: Weighted Weighted Average Aggregate Average Exercise Remaining Intrinsic Value Shares Price Contractual Term (In thousands) Outstanding January 2, 2016 $ $ Exercised Cancelled/expired Outstanding at July 2, 2016 $ $ Vested or expected to vest at July 2, 2016 $ $ Exercisable at July 2, 2016 $ $ As of July 2, 2016 , there were approximately 0.1 million nonvested stock options. The weighted average grant date fair value per award for nonvested stock options was $15.91 . As of July 2, 2016 , there was $1.7 million of total unrecognized compensation cost related to nonvested stock options granted under the Company’s stock option plans. That expense is expected to be recognized over a weighted average period of 1.7 years. The total fair value of shares vested during the six month periods ended July 2, 2016 and July 4, 2015 was $2.3 million . Restricted Stock In 2015 , the Company granted 105,245 market share units (“MSUs”) to a group of key executives with an aggregate grant date fair value of $4.6 million that vest 50% on each of the second and third anniversaries of the grant date as part of an annual long-term incentive plan (“LTIP”). The MSUs earned will vary from 30% to 200% of the number of MSUs awarded depending on the actual performance of the Company’s stock price over the vesting periods. The fair value for the MSUs granted was calculated using the Monte Carlo simulation model. For the six months ended July 4, 2015, the following assumptions were used in determining fair value: Six Months Ended Valuation Assumptions: July 4, 2015 Weighted-average fair value $ 43.35 Expected volatility 43.2% Dividend yield — Risk-free rate 1.1% to 1.7% Weighted-average expected annual forfeiture 5.0% In 2016 , the Company granted 452,922 performance shares that vest on the third anniversary of the grant date. The number of performance shares earned will vary from zero to 200% of the number of awards granted depending on the Company’s Total Shareholder Return (“TSR”) ranking relative to the TSR’s of the S&P Mid-Cap 400 constituents as well as an earnings-based performance condition. The performance shares have a grant date fair value of $11.8 million that was calculated using a Monte Carlo simulation model. In 2015 , the other portion of the LTIP consisted of an award of 243,419 performance shares that vest on the third anniversary of the grant date. The performance shares have a grant date fair value of $9.1 million that was calculated using a Monte Carlo simulation model. For the six months ended July 2, 2016 and July 4, 2015, the following assumptions were used in determining fair value: Six Months Ended Valuation Assumptions: July 2, 2016 July 4, 2015 Weighted-average fair value $ $ Expected volatility % % Dividend yield — — Risk-free rate % % Weighted-average expected annual forfeiture % % A summary of award activity under restricted stock plans as of July 2, 2016 and changes therein during the six month period then ended are as follows: Weighted Average Grant Shares Date Fair Value Nonvested stock at January 2, 2016 $ Granted Vested (a) Cancelled (a) Nonvested stock at July 2, 2016 (b) $ Expected to vest as of July 2, 2016 $ (a) Includes market share units granted to a group of key executives with the vesting of such units measured by the performance of the Company's stock price over the vesting period. (b) Excludes the potential impact of the performance share multiplier, which will vary from 30% to 200% of the number of MSUs awarded depending on the actual performance of the Company’s stock price over the vesting periods and zero to 200% of the number of LTIP awards granted depending on the Company’s TSR relative to the TSR of the S&P Mid-Cap 400 Index. As of July 2, 2016, there was $45.7 million of total unrecognized compensation cost related to nonvested stock awards granted under restricted stock plans. That expense is expected to be recognized over a weighted average period of 2.0 years. The total fair value of shares vested during the six month periods ended July 2, 2016 and July 4, 2015 was $4.5 million and $2.5 million, respectively.

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	6 Months Ended
	Jul. 02, 2016
RECENT ACCOUNTING PRONOUNCEMENTS
RECENT ACCOUNTING PRONOUNCEMENTS	14. RECENT ACCOUNTING PRONOUNCEMENTS In March 2016, new accounting guidance was issued on share-based compensation, which simplifies the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This guidance is effective for interim and annual periods beginning on or after December 15, 2016. The Company is currently evaluating the impact of the adoption of the new accounting guidance on its financial statements. In February 2016, new accounting guidance was issued on lease transactions. The guidance was issued to increase transparency and comparability among organizations by requiring lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by leases and disclosing key information about leasing arrangements. This guidance is effective for interim and annual periods beginning on or after December 15, 2018. The Company is currently evaluating the impact of the adoption of the new accounting guidance on its financial statements. In July 2015, new accounting guidance on accounting for inventory was issued, which requires entities to measure inventory at the lower of cost and net realizable value. This guidance is effective for interim and annual periods beginning on or after December 15, 2016. The Company is currently evaluating the impact of the adoption of the new accounting guidance on its financial statements. In May 2014, new accounting guidance on the accounting for revenue recognition was issued, which requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, this guidance was updated, which defers the effective date by one year and permits early adoption for interim and annual periods beginning on or after December 15, 2016. This guidance is effective for interim and annual periods beginning on or after December 15, 2017. The Company is continuing to evaluate the impact of the adoption of the new accounting guidance on its financial statements.

BASIS OF PRESENTATION (Policies

BASIS OF PRESENTATION (Policies)	6 Months Ended
	Jul. 02, 2016
BASIS OF PRESENTATION
NATURE OF OPERATIONS	NATURE OF OPERATIONS Kate Spade & Company is engaged primarily in the design and marketing of a broad range of accessories and apparel. The Company’s fiscal year ends on the Saturday closest to December 31. The 2016 fiscal year, ending December 31, 2016, reflects a 52 -week period, resulting in a 13 -week, three-month period and a 26 -week, six-month period for the second quarter. The 2015 fiscal year, ending January 2, 2016, reflects a 52 -week period, resulting in a 13 -week, three-month period and a 26 -week, six-month period for the second quarter .
PRINCIPLES OF CONSOLIDATION	PRINCIPLES OF CONSOLIDATION The Condensed Consolidated Financial Statements include the accounts of the Company. All inter-company balances and transactions have been eliminated in consolidation.
USE OF ESTIMATES AND CRITICAL ACCOUNTING POLICIES	USE OF ESTIMATES AND CRITICAL ACCOUNTING POLICIES The Company’s critical accounting policies are those that are most important to the portrayal of its financial condition and results of operations in conformity with US GAAP. These critical accounting policies are applied in a consistent manner throughout all periods presented. The Company’s critical accounting policies are summarized in Note 1 of Notes to Consolidated Financial Statements included in its Annual Report on Form 10-K for the fiscal year ended January 2, 2016. The application of critical accounting policies requires that the Company make estimates and assumptions about future events and apply judgments that affect the reported amounts of revenues and expenses. Estimates by their nature are based on judgments and available information. Therefore, actual results could materially differ from those estimates under different assumptions and conditions. The Company continues to monitor the critical accounting policies to ensure proper application of current rules and regulations. During the second quarter of 2016, there were no significant changes in the critical accounting policies discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended January 2, 2016.
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS	RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS On January 3, 2016, the first day of the Company’s 2016 fiscal year, the Company retrospectively adopted new accounting guidance on debt issuance costs and reclassified the carrying value of its debt issuance costs related to term loans issued under its term loan credit agreement, which mature in April 2021 (collectively, the “Term Loan”) from an asset to a direct reduction of the liability. Accordingly, prior periods have been conformed to the current period’s presentation. As of July 2, 2016, January 2, 2016 and July 4, 2015, the aggregate carrying value of the debt issuance costs related to the Term Loan was $4.4 million, $4.8 million and $5.2 million, respectively. In November 2015, new accounting guidance on the balance sheet classification of deferred taxes was issued, which eliminates the current requirement to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. The guidance requires companies to classify all deferred tax assets and liabilities as noncurrent. This guidance is effective for interim and annual periods beginning on or after December 15, 2016, and early adoption is permitted. On July 3, 2016, the first day of the Company’s third fiscal quarter, the Company prospectively adopted this new accounting guidance. The Company will prospectively classify its existing deferred tax balances as noncurrent in future filings.

DISCONTINUED OPERATIONS (Tables

DISCONTINUED OPERATIONS (Tables)	6 Months Ended
	Jul. 02, 2016
DISCONTINUED OPERATIONS AND DISPOSALS
Summary of results of discontinued operations	Six Months Ended Three Months Ended July 2, 2016 July 4, 2015 July 2, 2016 July 4, 2015 In thousands (26 Weeks) (26 Weeks) (13 Weeks) (13 Weeks) Net sales $ — $ $ — $ Income (loss) before provision for income taxes $ $ $ $ Provision for income taxes — — Income (loss) from discontinued operations, net of income taxes $ $ $ $ Gain (loss) on disposal of discontinued operations, net of income taxes $ $ $ $

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	6 Months Ended
	Jul. 02, 2016
STOCKHOLDERS' EQUITY
Schedule of activity in the Capital in excess of par value, Retained earnings and Common stock in treasury, at cost accounts	Activity for the six months ended July 2, 2016 in the Capital in excess of par value, Retained earnings and Common stock in treasury, at cost accounts was as follows: Common Stock Capital in Excess Retained in Treasury, In thousands of Par Value Earnings at Cost Balance as of January 2, 2016 $ $ $ Net income — — Exercise of stock options — Restricted shares issued, net of cancellations and shares withheld for taxes — Share-based compensation — — Balance as of July 2, 2016 $ $ $ Activity for the six months ended July 4, 2015 in the Capital in excess of par value, Retained earnings and Common stock in treasury, at cost accounts was as follows: Common Stock Capital in Excess Retained in Treasury, In thousands of Par Value Earnings at Cost Balance as of January 3, 2015 $ $ $ Net loss — — Exercise of stock options — Restricted shares issued, net of cancellations and shares withheld for taxes — Share-based compensation — — Balance as of July 4, 2015 $ $ $
Schedule of accumulated other comprehensive (loss) income	In thousands July 2, 2016 January 2, 2016 July 4, 2015 Cumulative translation adjustment, net of income taxes of $0 $ $ $ Unrealized (losses) gains on cash flow hedging derivatives, net of income taxes of $(1,133) , $8 and $764 , respectively Accumulated other comprehensive loss, net of income taxes $ $ $
Schedule of the change in each component of Accumulated other comprehensive (loss) income, net of income taxes	The following table presents the change in each component of Accumulated other comprehensive (loss) income, net of income taxes for the six months ended July 2, 2016: Unrealized Gains Cumulative (Losses) on Cash Translation Flow Hedging In thousands Adjustment Derivatives Balance as of January 2, 2016 $ $ Other comprehensive income (loss) before reclassification Amounts reclassified from accumulated other comprehensive (loss) income Net current-period other comprehensive income (loss) Balance as of July 2, 2016 $ $ The following table presents the change in each component of Accumulated other comprehensive (loss) income, net of income taxes for the six months ended July 4, 2015: Unrealized Gains Cumulative (Losses) on Cash Translation Flow Hedging In thousands Adjustment Derivatives Balance as of January 3, 2015 $ $ Other comprehensive loss before reclassification Amounts reclassified from accumulated other comprehensive income — Net current-period other comprehensive loss Balance as of July 4, 2015 $ $ The following table presents the change in each component of Accumulated other comprehensive loss, net of income taxes for the three months ended July 2, 2016: Unrealized Cumulative Losses on Cash Translation Flow Hedging In thousands Adjustment Derivatives Balance as of April 2, 2016 $ $ Other comprehensive income (loss) before reclassification Amounts reclassified from accumulated other comprehensive (loss) income Net current-period other comprehensive income (loss) Balance as of July 2, 2016 $ $ The following table presents the change in each component of Accumulated other comprehensive (loss) income, net of income taxes for the three months ended July 4, 2015: Unrealized Gains Cumulative (Losses) on Cash Translation Flow Hedging In thousands Adjustment Derivatives Balance as of April 4, 2015 $ $ Other comprehensive loss before reclassification Amounts reclassified from accumulated other comprehensive income — Net current-period other comprehensive loss Balance as of July 4, 2015 $ $

DEBT AND LINES OF CREDIT (Table

DEBT AND LINES OF CREDIT (Tables)	6 Months Ended
	Jul. 02, 2016
DEBT AND LINES OF CREDIT
Schedule of long-term debt	In thousands July 2, 2016 January 2, 2016 July 4, 2015 Term Loan credit facility, due April 2021 (a) $ $ $ Revolving credit facility — — — Capital lease obligations Total debt Less: Short-term borrowings (b) Long-term debt $ $ $ (a) The balance as of July 2, 2016, January 2, 2016 and July 4, 2015 included aggregate unamortized debt discount and deferred financing fees of $5.8 million, $6.3 million and $6.9 million, respectively. (b) At July 2, 2016, January 2, 2016 and July 4, 2015, the balance consisted of Term Loan amortization payments and obligations under capital leases.
Schedule of availability under the Company's ABL Facility	Total Borrowing Outstanding Letters of Available Excess In thousands Facility (a) Base (a) Borrowings Credit Issued Capacity Capacity (b) ABL Facility (a) $ $ $ — $ $ $ (a) Availability under the ABL Facility is the lesser of $200.0 million or a borrowing base that is computed monthly and comprised of the Company’s eligible cash, accounts receivable and inventory. (b) Excess capacity represents available capacity reduced by the minimum required aggregate borrowing availability under the ABL Facility of $20.0 million.

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	6 Months Ended
	Jul. 02, 2016
FAIR VALUE MEASUREMENTS
Schedule of financial assets and liabilities of the Company measured at fair value on recurring basis	Level 2 In thousands July 2, 2016 January 2, 2016 July 4, 2015 Financial Assets: Derivatives $ $ $ Financial Liabilities: Derivatives $ $ $
Schedule of non-financial assets of the Company measured at fair value on non-recurring basis	The following table presents the non-financial assets the Company measured at fair value on a non-recurring basis in 2015, based on such fair value hierarchy: Total Losses Net Carrying Fair Value Measured and Recorded at Six Months Three Months Value as of Reporting Date Using: Ended Ended In thousands July 4, 2015 Level 1 Level 2 Level 3 July 4, 2015 July 4, 2015 Property and equipment $ — $ — $ — $ — $ $
Schedule of fair values and carrying values of the Company's debt instruments	July 2, 2016 January 2, 2016 July 4, 2015 Carrying Carrying Carrying In thousands Fair Value Value Fair Value Value Fair Value Value Term Loan credit facility, due April 2021 (a) $ $ $ $ $ $ ABL Facility (b) — — — — — — (a) Carrying values include aggregate unamortized debt discount and deferred financing fees. (b) Borrowings under the ABL Facility bear interest based on market rate; accordingly its fair value approximates its carrying value.

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	6 Months Ended
	Jul. 02, 2016
COMMITMENTS AND CONTINGENCIES
Schedule of estimated future minimum lease payments under the noncancelable capital lease	As of July 2, 2016, the estimated future minimum lease payments under the noncancelable capital lease were as follows: In thousands 2016 $ 2017 2018 2019 2020 Thereafter Total Less: Amounts representing interest and executory costs Net present values Less: Capital lease obligations included in short-term debt Long-term capital lease obligations $

STREAMLINING INITIATIVES (Table

STREAMLINING INITIATIVES (Tables)	6 Months Ended
	Jul. 02, 2016
STREAMLINING INITIATIVES
Schedule of expenses associated with the Company's streamlining actions	Six Months Ended Three Months Ended July 4, 2015 July 4, 2015 In thousands (26 Weeks) (13 Weeks) KATE SPADE North America $ $ KATE SPADE International Adelington Design Group Other (a) Total $ $ (a) Other consists of unallocated corporate restructuring costs.
Summary rollforward of the liability for streamlining initiatives	Contract Payroll and Termination In thousands Related Costs Costs Other Costs Total Balance at January 2, 2016 $ $ $ $ 2016 spending Balance at July 2, 2016 $ $ $ $

EARNINGS PER COMMON SHARE (Tabl

EARNINGS PER COMMON SHARE (Tables)	6 Months Ended
	Jul. 02, 2016
EARNINGS PER COMMON SHARE:
Schedule of computation of basic and diluted earnings per common share	Six Months Ended Three Months Ended July 2, 2016 July 4, 2015 July 2, 2016 July 4, 2015 In thousands, except per share data (26 Weeks) (26 Weeks) (13 Weeks) (13 Weeks) Income (loss) from continuing operations $ $ $ $ Income (loss) from discontinued operations, net of income taxes Net income (loss) $ $ $ $ Basic weighted average shares outstanding Stock options and nonvested shares (a) — Diluted weighted average shares outstanding Earnings (loss) per share: Basic Income (loss) from continuing operations $ $ $ $ Income (loss) from discontinued operations $ $ $ $ — Net income (loss) $ $ $ $ Diluted Income (loss) from continuing operations $ $ $ $ Income (loss) from discontinued operations $ $ $ $ — Net income (loss) $ $ $ $ (a) Because the Company incurred a loss from continuing operations for the six months ended July 4, 2015, approximately 1.0 million outstanding stock options and approximately 2.0 million outstanding nonvested shares were considered antidilutive for such period, and excluded from the computation of diluted loss per share.

SEGMENT REPORTING (Tables)

SEGMENT REPORTING (Tables)	6 Months Ended
	Jul. 02, 2016
SEGMENT REPORTING
Schedule of segment reporting information, by segment	Adjusted Dollars in thousands Net Sales % to Total EBITDA % of Sales Six Months Ended July 2, 2016 (26 Weeks) KATE SPADE North America $ $ % KATE SPADE International % Adelington Design Group % Totals $ Six Months Ended July 4, 2015 (26 Weeks) KATE SPADE North America $ $ % KATE SPADE International % Adelington Design Group % Totals $ Three Months Ended July 2, 2016 (13 Weeks) KATE SPADE North America $ $ % KATE SPADE International % Adelington Design Group % Totals $ Three Months Ended July 4, 2015 (13 Weeks) KATE SPADE North America $ $ % KATE SPADE International % Adelington Design Group % Totals $
Schedule of reconciliation to Income (Loss) from Continuing Operations	Six Months Ended Three Months Ended July 2, 2016 July 4, 2015 July 2, 2016 July 4, 2015 In thousands (26 Weeks) (26 Weeks) (13 Weeks) (13 Weeks) Reportable Segments Adjusted EBITDA: KATE SPADE North America $ $ $ $ KATE SPADE International (a) Adelington Design Group Total Reportable Segments Adjusted EBITDA Depreciation and amortization, net (b) Charges due to streamlining initiatives (c) , brand-exiting activities, acquisition related costs and loss on asset disposals and impairments, net Joint venture contract termination fee — — — Share-based compensation (d) Adjusted equity loss included in Reportable Segments Adjusted EBITDA (e) Operating Income (Loss) Other expense, net (a) Loss on settlement of note receivable — — — Interest expense, net Provision for income taxes Discontinued operations, net of income taxes Net Income (Loss) $ $ $ $ (a) Amounts include equity in the adjusted losses of the Company’s equity method investees of $3.2 million and $2.7 million for the six months ended July 2, 2016 and July 4, 2015, respectively and $2.0 million and $1.9 million for the three months ended July 2, 2016 and July 4, 2015, respectively. (b) Ex cludes amortization included in Interest expense, net. (c) See Note 8 – Streamlining Initiatives for a discussion of streamlining charges . (d) Includes share-based compensation expense of $0.2 million in the six months ended July 4, 2015, that was classified as restructuring. (e) Excludes $0.1 million of joint venture restructuring expense included in equity losses in the six and three months ended July 4, 2015.
Schedule of geographic data	Dollars in thousands Net Sales % to Total Six Months Ended July 2, 2016 (26 Weeks) Domestic $ % International % Total $ % Six Months Ended July 4, 2015 (26 Weeks) Domestic $ % International % Total $ % Three Months Ended July 2, 2016 (13 Weeks) Domestic $ % International % Total $ % Three Months Ended July 4, 2015 (13 Weeks) Domestic $ % International % Total $ %

DERIVATIVE INSTRUMENTS (Tables)

DERIVATIVE INSTRUMENTS (Tables)	6 Months Ended
	Jul. 02, 2016
DERIVATIVE INSTRUMENTS
Summary of effect of foreign currency exchange contracts on Condensed Consolidated Financial Statements	Location of Gain or Amount of Gain or (Loss) Reclassified Amount of Gain or Amount of Gain or (Loss) Recognized from Accumulated (Loss) Reclassified (Loss) Recognized in in Accumulated OCI into Operations from Accumulated Operations on OCI on Derivative (Effective and OCI into Operations Derivative In thousands (Effective Portion) Ineffective Portion) (Effective Portion) (Ineffective Portion) Six Months Ended July 2, 2016 (26 Weeks) $ Cost of goods sold $ $ — Six Months Ended July 4, 2015 (26 Weeks) Cost of goods sold — Three Months Ended July 2, 2016 (13 Weeks) Cost of goods sold — Three Months Ended July 4, 2015 (13 Weeks) Cost of goods sold —
Designated as Hedging Instrument
DERIVATIVE INSTRUMENTS
Summary of fair value and presentation in Condensed Consolidated Financial Statements for derivatives	Foreign Currency Contracts Designated as Hedging Instruments In thousands Asset Derivatives Liability Derivatives Balance Sheet Notional Balance Sheet Notional Period Location Amount Fair Value Location Amount Fair Value July 2, 2016 Other current assets $ 11,637 $ Accrued expenses $ $ January 2, 2016 Other current assets Accrued expenses — — July 4, 2015 Other current assets Accrued expenses
Not Designated as Hedging Instrument
DERIVATIVE INSTRUMENTS
Summary of fair value and presentation in Condensed Consolidated Financial Statements for derivatives	Foreign Currency Contracts Not Designated as Hedging Instruments In thousands Asset Derivatives Liability Derivatives Balance Sheet Notional Balance Sheet Notional Period Location Amount Fair Value Location Amount Fair Value July 2, 2016 Other current assets $ — $ — Accrued expenses $ $ January 2, 2016 Other current assets — — Accrued expenses July 4, 2015 Other current assets — — Accrued expenses

SHARE-BASED COMPENSATION (Table

SHARE-BASED COMPENSATION (Tables)	6 Months Ended
	Jul. 02, 2016
SHARE-BASED COMPENSATION
Schedule of valuation assumptions used to estimate fair value of stock options granted	Six Months Ended Valuation Assumptions: July 4, 2015 Weighted-average fair value of options granted $ 15.92 Expected volatility 76.5% Weighted-average volatility 58.7% Expected term (in years) 4.2 Dividend yield - Risk-free rate 1.9% Expected annual forfeiture 15.3%
Summary of award activity under stock option plans	Weighted Weighted Average Aggregate Average Exercise Remaining Intrinsic Value Shares Price Contractual Term (In thousands) Outstanding January 2, 2016 $ $ Exercised Cancelled/expired Outstanding at July 2, 2016 $ $ Vested or expected to vest at July 2, 2016 $ $ Exercisable at July 2, 2016 $ $
Summary of award activity under restricted stock plans	Weighted Average Grant Shares Date Fair Value Nonvested stock at January 2, 2016 $ Granted Vested (a) Cancelled (a) Nonvested stock at July 2, 2016 (b) $ Expected to vest as of July 2, 2016 $ (a) Includes market share units granted to a group of key executives with the vesting of such units measured by the performance of the Company's stock price over the vesting period. (b) Excludes the potential impact of the performance share multiplier, which will vary from 30% to 200% of the number of MSUs awarded depending on the actual performance of the Company’s stock price over the vesting periods and zero to 200% of the number of LTIP awards granted depending on the Company’s TSR relative to the TSR of the S&P Mid-Cap 400 Index.
Market Share Units
SHARE-BASED COMPENSATION
Schedule of valuation assumptions used to estimate fair value of awards granted	Six Months Ended Valuation Assumptions: July 4, 2015 Weighted-average fair value $ 43.35 Expected volatility 43.2% Dividend yield — Risk-free rate 1.1% to 1.7% Weighted-average expected annual forfeiture 5.0%
Performance Shares
SHARE-BASED COMPENSATION
Schedule of valuation assumptions used to estimate fair value of awards granted	Six Months Ended Valuation Assumptions: July 2, 2016 July 4, 2015 Weighted-average fair value $ $ Expected volatility % % Dividend yield — — Risk-free rate % % Weighted-average expected annual forfeiture % %

BASIS OF PRESENTATION (Details)

BASIS OF PRESENTATION (Details) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jul. 02, 2016USD ($)	Jul. 04, 2015USD ($)	Jul. 02, 2016USD ($)segment	Jul. 04, 2015USD ($)	Dec. 31, 2016	Jan. 02, 2016USD ($)
NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Number of reportable segments			3
Period in fiscal year	91 days	91 days	182 days	182 days	364 days	364 days
Debt issuance cost related to term loan | $	$ 4.4	$ 5.2	$ 4.4	$ 5.2		$ 4.8
North America
NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Number of Operating Segments			1
International - Japan, Asia and Europe
NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Number of Operating Segments			3

DISCONTINUED OPERATIONS AND D34

DISCONTINUED OPERATIONS AND DISPOSALS - Summarized results (Details) - Juicy Couture and Lucky Brand - Discontinued Operations, Disposed of by Sale - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
DISCONTINUED OPERATIONS AND DISPOSALS
Pretax income (charges) related to disposal of discontinued operations	$ 300	$ (800)	$ 1,500	$ (1,500)
Results of discontinued operations
Net sales		(21)		187
Income (loss) before provision for income taxes	1,941	78	1,443	(788)
Provision for income taxes		5		59
Income (loss) from discontinued operations, net of income taxes	1,941	73	1,443	(847)
Gain (loss) on disposal of discontinued operations, net of income taxes	$ 273	$ (781)	$ 1,491	$ (1,523)

DISCONTINUED OPERATIONS AND D35

DISCONTINUED OPERATIONS AND DISPOSALS - Other (Details) - USD ($) $ in Thousands	Mar. 04, 2015	Jul. 04, 2015	Apr. 04, 2015	Jul. 04, 2015
DISCONTINUED OPERATIONS AND DISPOSALS
Net proceeds from settlement of note receivable				$ 75,128
Loss on settlement of Lucky Brand Note				9,873
Kate Spade Saturday operations and Jack Spade retail stores | Disposal Group, Not Discontinued Operations
Disposal Group, Not Discontinued Operation
Pretax losses from closures		$ 1,800		$ 17,600
Lucky Brand, LLC
DISCONTINUED OPERATIONS AND DISPOSALS
Term of note	3 years
Note receivable	$ 85,000
Proceeds from settlement of notes prior to maturity	81,000
Aggregate amount of principal and interest collected	$ 89,000
Loss on settlement of Lucky Brand Note			$ 9,900

STOCKHOLDERS' EQUITY - Activity

STOCKHOLDERS' EQUITY - Activity during the period (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
Activity in the Capital in excess of par value, Retained earnings and Common stock in treasury, at cost
Balance at the beginning of the period			$ 245,221
Net income (loss)	$ 26,773	$ 8,541	38,409	$ (46,680)
Balance at the end of the period	307,172	164,014	307,172	164,014
Capital in Excess of Par Value
Activity in the Capital in excess of par value, Retained earnings and Common stock in treasury, at cost
Balance at the beginning of the period			224,677	199,100
Share-based compensation			16,156	12,756
Balance at the end of the period	240,833	211,856	240,833	211,856
Retained Earnings
Activity in the Capital in excess of par value, Retained earnings and Common stock in treasury, at cost
Balance at the beginning of the period			1,155,838	1,145,643
Net income (loss)			38,409	(46,680)
Exercise of stock options			(463)	(1,919)
Restricted shares issued, net of cancellations and shares withheld for taxes			(2,380)	(2,478)
Balance at the end of the period	1,191,404	1,094,566	1,191,404	1,094,566
Treasury Shares
Activity in the Capital in excess of par value, Retained earnings and Common stock in treasury, at cost
Balance at the beginning of the period			(1,281,690)	(1,291,583)
Exercise of stock options			721	4,347
Restricted shares issued, net of cancellations and shares withheld for taxes			1,846	1,321
Balance at the end of the period	$ (1,279,123)	$ (1,285,915)	$ (1,279,123)	$ (1,285,915)

STOCKHOLDERS' EQUITY - AOCI (De

STOCKHOLDERS' EQUITY - AOCI (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jan. 02, 2016	Jul. 04, 2015
Accumulated other comprehensive (loss) Income
Cumulative translation adjustment, net of income taxes of $0					$ (20,308)	$ (30,054)	$ (34,310)
Unrealized (losses) gains on cash flow hedging derivatives, net of income taxes of $(1,133), $8 and $764, respectively					(2,071)	13	1,380
Accumulated other comprehensive loss, net of income taxes	$ (22,379)	$ (32,930)	$ (30,041)	$ (32,930)	(22,379)	(30,041)	(32,930)
Income tax effect on cumulative translation adjustment					0	0	0
Income tax effect on unrealized (losses) gains on cash flow hedging derivatives					(1,133)	8	764
Change in each component of Accumulated other comprehensive (loss) income, net of income taxes
Balance at beginning of period			(30,041)
Balance at end of period	(22,379)	(32,930)	(22,379)	(32,930)
Cumulative Translation Adjustment
Accumulated other comprehensive (loss) Income
Accumulated other comprehensive loss, net of income taxes	(26,076)	(32,443)	(30,054)	(32,096)	(20,308)	(30,054)	(34,310)
Change in each component of Accumulated other comprehensive (loss) income, net of income taxes
Balance at beginning of period	(26,076)	(32,443)	(30,054)	(32,096)
Other comprehensive income (loss) before reclassification	4,573	(1,867)	8,551	(2,214)
Amounts reclassified from accumulated other comprehensive (loss) income	1,195		1,195
Net current-period other comprehensive income (loss)	5,768	(1,867)	9,746	(2,214)
Balance at end of period	(20,308)	(34,310)	(20,308)	(34,310)
Unrealized Gains (Losses) on Cash Flow Hedging Derivatives
Accumulated other comprehensive (loss) Income
Accumulated other comprehensive loss, net of income taxes	(935)	1,389	13	2,110	$ (2,071)	$ 13	$ 1,380
Change in each component of Accumulated other comprehensive (loss) income, net of income taxes
Balance at beginning of period	(935)	1,389	13	2,110
Other comprehensive income (loss) before reclassification	(1,095)	(136)	(1,820)	(509)
Amounts reclassified from accumulated other comprehensive (loss) income	(41)	127	(264)	(221)
Net current-period other comprehensive income (loss)	(1,136)	(9)	(2,084)	(730)
Balance at end of period	$ (2,071)	$ 1,380	$ (2,071)	$ 1,380

INCOME TAXES (Details)

INCOME TAXES (Details) $ in Millions	Jul. 02, 2016USD ($)
Uncertain tax positions	$ 9.3
Minimum
Expected reduction in the liability for unrecognized tax benefits	0.7
Maximum
Expected reduction in the liability for unrecognized tax benefits	$ 3.7

DEBT AND LINES OF CREDIT - Summ

DEBT AND LINES OF CREDIT - Summary (Details) - USD ($) $ in Thousands	Jul. 02, 2016	Jan. 02, 2016	Jul. 04, 2015
DEBT AND LINES OF CREDIT
Total debt	$ 394,055	$ 396,793	$ 397,458
Less: Short-term borrowings	3,592	3,625	3,595
Long-term debt	390,463	393,168	393,863
Term Loan credit facility, due April 2021
DEBT AND LINES OF CREDIT
Total debt	386,179	388,667	389,097
Unamortized debt discount and deferred financing fees	5,800	6,300	6,900
Capital lease obligations
DEBT AND LINES OF CREDIT
Total debt	$ 7,876	$ 8,126	$ 8,361

DEBT AND LINES OF CREDIT - Term

DEBT AND LINES OF CREDIT - Term Loan (Details) - Term Loan credit facility, due April 2021 $ in Millions	Apr. 10, 2014USD ($)	Jan. 03, 2015	Jul. 02, 2016USD ($)
DEBT AND LINES OF CREDIT
Aggregate principal amount	$ 400
Quarterly amortization payments	$ 1
Additional incremental overall limit			$ 100
LIBOR
DEBT AND LINES OF CREDIT
Floor rate (as a percent)		1.00%
Spread on variable rate basis		3.00%
Maximum
DEBT AND LINES OF CREDIT
Consolidated net total secured debt ratio used for determining additional amount			3.75

DEBT AND LINES OF CREDIT - ABL

DEBT AND LINES OF CREDIT - ABL Facility (Details) $ in Thousands	May 16, 2014USD ($)item	Jul. 02, 2016USD ($)
Revolving credit/ABL facility
DEBT AND LINES OF CREDIT
Available capacity under amended facility	$ 200,000	$ 200,000
Option to increase borrowing under certain specified conditions	$ 100,000
Number of borrowing options under amended facility | item	2
Fixed charge coverage ratio	1
Trailing number of quarters over which fixed charge coverage ratio is required to be maintained | item	4
Availability for number of consecutive business days to apply cash collections to reduce outstanding borrowings, maximum availability under credit facility	3 days
Availability below which specified fixed charge coverage ratio has to be maintained	$ 15,000
Minimum aggregate borrowing availability as a percentage of commitments then in effect below which a specified fixed charge coverage ratio has to be maintained	10.00%
Availability for number of consecutive business days for which specified fixed charge coverage ratio has to be maintained	3 days
Availability under amended facility
Total Facility	$ 200,000	200,000
Borrowing Base		277,102
Letters of Credit Issued		10,512
Available Capacity		189,488
Excess Capacity		$ 169,488
Revolving credit/ABL facility | Maximum
DEBT AND LINES OF CREDIT
Covenant to apply cash collections to reduce outstanding borrowings, maximum availability under credit facility	$ 20,000
Covenant to apply cash collections to reduce outstanding borrowings, maximum availability under credit facility as a percentage of the lesser of the borrowing base and aggregate commitments	12.50%
Swingline revolving credit line
DEBT AND LINES OF CREDIT
Available capacity under amended facility	$ 30,000
Availability under amended facility
Total Facility	30,000
Multi-currency revolving credit line
DEBT AND LINES OF CREDIT
Available capacity under amended facility	35,000
Availability under amended facility
Total Facility	35,000
Letters of credit
DEBT AND LINES OF CREDIT
Available capacity under amended facility	125,000
Availability under amended facility
Total Facility	125,000
Standby letters of credit
DEBT AND LINES OF CREDIT
Available capacity under amended facility	40,000
Availability under amended facility
Total Facility	$ 40,000

FAIR VALUE MEASUREMENTS - Asset

FAIR VALUE MEASUREMENTS - Assets and liabilities FV (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 04, 2015	Jul. 04, 2015	Jul. 02, 2016	Jan. 02, 2016
Fair value on non-recurring basis
Assets and liabilities measured at fair value
Property and equipment impairment charge	$ 824	$ 4,180
Fair value on recurring basis | Fair Value Measured and Recorded at Reporting Date Using: Level 2
Assets and liabilities measured at fair value
Financial Assets: Derivatives	2,770	2,770	$ 8	$ 1,017
Financial Liabilities: Derivatives	$ (399)	$ (399)	$ (2,816)	$ (354)

FAIR VALUE MEASUREMENTS - FV of

FAIR VALUE MEASUREMENTS - FV of debt (Details) - Term Loan credit facility, due April 2021 - USD ($) $ in Thousands	Jul. 02, 2016	Jan. 02, 2016	Jul. 04, 2015
Fair values and carrying values of debt instruments
Fair Value	$ 388,942	$ 381,333	$ 393,361
Carrying value	$ 386,179	$ 388,667	$ 389,097

COMMITMENTS AND CONTINGENCIES44

COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands	3 Months Ended
	Jun. 29, 2013item	Jul. 02, 2016USD ($)item
Estimated future minimum lease payments under the noncancelable capital lease
2,016		$ 1,055
2,017		2,141
2,018		2,194
2,019		2,247
2,020		2,300
Thereafter		10,781
Total		20,718
Less: Amounts representing interest and executory costs		(12,842)
Net present values		7,876
Less: Capital lease obligations included in short-term debt		(543)
Long-term capital lease obligations		$ 7,333
Various dispositions
Capital lease obligations
Number of store leases assigned to third parties | item		277
Number of leases for which the entity is secondarily liable | item		113
Future aggregate payments under disposition leases		$ 82,200
Sale Leaseback Agreement for North Bergen, New Jersey Office
Capital lease obligations
Lease term	12 years
Number of renewal options under the sale-leaseback transaction | item	2
Term of options under the sale-leaseback transaction	5 years

STREAMLINING INITIATIVES (Detai

STREAMLINING INITIATIVES (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
STREAMLINING INITIATIVES
Expected payment of accrued streamlining costs in the next 12 months		$ 1,900
Expenses associated with streamlining actions	$ 7,121	0	$ 25,995
Non cash pretax charges Asset write-downs			7,600
Roll forward of liability for streamlining initiatives
Balance at the beginning of the period		10,509
2016 spending		(5,326)
Balance at the end of the period		5,183
Other
STREAMLINING INITIATIVES
Expenses associated with streamlining actions	683		3,224
KATE SPADE North America | Reportable Segments
STREAMLINING INITIATIVES
Expenses associated with streamlining actions	1,317		13,260
Kate Spade International | Reportable Segments
STREAMLINING INITIATIVES
Expenses associated with streamlining actions	4,590		7,647
Adelington Design Group | Reportable Segments
STREAMLINING INITIATIVES
Expenses associated with streamlining actions	$ 531		1,864
Payroll and Related Costs
STREAMLINING INITIATIVES
Expenses associated with streamlining actions			11,200
Roll forward of liability for streamlining initiatives
Balance at the beginning of the period		2,338
2016 spending		(2,278)
Balance at the end of the period		60
Asset Write Downs
STREAMLINING INITIATIVES
Expenses associated with streamlining actions			7,400
Contract Termination Costs
STREAMLINING INITIATIVES
Expenses associated with streamlining actions			6,700
Roll forward of liability for streamlining initiatives
Balance at the beginning of the period		4,793
2016 spending		(810)
Balance at the end of the period		3,983
Other Costs
STREAMLINING INITIATIVES
Expenses associated with streamlining actions			$ 700
Roll forward of liability for streamlining initiatives
Balance at the beginning of the period		3,378
2016 spending		(2,238)
Balance at the end of the period		$ 1,140

EARNINGS PER COMMON SHARE - Bas

EARNINGS PER COMMON SHARE - Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
Basic and diluted earnings per common share
Income (loss) from continuing operations	$ 24,559	$ 9,249	$ 35,475	$ (44,310)
Income (loss) from discontinued operations, net of income taxes	2,214	(708)	2,934	(2,370)
Net income (loss)	$ 26,773	$ 8,541	$ 38,409	$ (46,680)
Basic weighted average shares outstanding	128,000	127,663	127,966	127,576
Stock options and nonvested shares	1,140	768	922
Diluted weighted average shares outstanding	129,140	128,431	128,888	127,576
Basic
Income (loss) from continuing operations (in dollars per share)	$ 0.19	$ 0.07	$ 0.28	$ (0.35)
Income (loss) from discontinued operations (in dollars per share)	0.02		0.02	(0.02)
Net income (loss) (in dollars per share)	0.21	0.07	0.30	(0.37)
Diluted
Income (loss) from continuing operations (in dollars per share)	0.19	0.07	0.28	(0.35)
Income (loss) from discontinued operations (in dollars per share)	0.02		0.02	(0.02)
Net income (loss) (in dollars per share)	$ 0.21	$ 0.07	$ 0.30	$ (0.37)

EARNINGS PER COMMON SHARE - Ant

EARNINGS PER COMMON SHARE - Antidilutive securities (Details) shares in Millions	6 Months Ended
	Jul. 04, 2015shares
Stock options
Anti-dilutive shares
Shares excluded from computation of diluted loss per share	1
Outstanding nonvested shares
Anti-dilutive shares
Shares excluded from computation of diluted loss per share	2

ADDITIONAL FINANCIAL INFORMAT48

ADDITIONAL FINANCIAL INFORMATION - Cash flows disclosures (Details) - USD ($) $ in Millions	6 Months Ended		12 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jan. 02, 2016
ADDITIONAL FINANCIAL INFORMATION
Net income tax payments	$ 1.2	$ 1.2
Interest payments	12.5	8.6
Interest received		9.4
Accrued capital expenditures	$ 5.4	$ 6.9	$ 8.1

ADDITIONAL FINANCIAL INFORMAT49

ADDITIONAL FINANCIAL INFORMATION - Related party disclosures (Details) $ in Thousands	3 Months Ended				6 Months Ended
	Jul. 02, 2016USD ($)	Apr. 02, 2016USD ($)	Jul. 04, 2015USD ($)	Apr. 04, 2015USD ($)item	Jul. 02, 2016USD ($)	Jul. 04, 2015USD ($)	Jan. 02, 2016USD ($)	Oct. 03, 2015USD ($)	Jan. 03, 2015
Related Party Transactions
Payments to acquire additional interest in investee						$ 10,000
Net Sales	$ 319,691		$ 281,118		$ 594,113	536,434
Contract termination fee				$ 26,000		26,000
Equity losses of equity investees	(2,000)		(2,000)		(3,248)	(2,754)
Other assets
Related Party Transactions
Investments in and advances to Joint venture	33,800		$ 24,600		33,800	$ 24,600	$ 28,100
Co-venturer, Walton Brown
Related Party Transactions
Number of Joint Ventures | item				2
KSC and KS HMT | Co-venturer, Walton Brown
Related Party Transactions
Proceeds received in relation to joint ventures interests				$ 17,400
Ownership percentage sold (as a percent)				50.00%
KSC | Joint venture
Related Party Transactions
Ownership interest (as a percent)				50.00%
Initial term of joint venture				10 years
Loans to related parties								$ 5,000
Additional loan to related parties		$ 700
KSC | Investee
Related Party Transactions
Ownership interest (as a percent)									40.00%
Ownership interest acquired (as a percent)				60.00%
Aggregate payment				$ 36,000
Payments to acquire additional interest in investee				10,000
Payment to terminate contracts				26,000
KSC | Investee | SG&A
Related Party Transactions
Contract termination fee				$ 26,000
KSC | Walton Brown | Joint venture
Related Party Transactions
Ownership interest (as a percent)				50.00%
Loans to related parties								$ 5,000
Additional loan to related parties		$ 700
KS HMT | Joint venture
Related Party Transactions
Ownership interest (as a percent)				50.00%
Initial term of joint venture				10 years
Loans to related parties	5,800				5,800
KS HMT | Investee
Related Party Transactions
Gain (loss) on formation of KS HMT				$ 0
KS HMT | Investee | Other assets
Related Party Transactions
Amount reclassified from net assets				$ 14,000
KS HMT | Walton Brown | Joint venture
Related Party Transactions
Ownership interest (as a percent)				50.00%
Loans to related parties	$ 5,800				$ 5,800
KATE SPADE businesses in Hong Kong, Macau and Taiwan | Investee
Related Party Transactions
Net Sales				$ 6,400
KATE SPADE businesses in Hong Kong, Macau and Taiwan | Investee | Other assets
Related Party Transactions
Amount reclassified from goodwill				$ 16,000

SEGMENT REPORTING - Sales and E

SEGMENT REPORTING - Sales and EBITDA (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2016USD ($)	Jul. 04, 2015USD ($)	Jul. 02, 2016USD ($)segment	Jul. 04, 2015USD ($)
SEGMENT REPORTING
Number of reportable segments | segment			3
Net Sales	$ 319,691	$ 281,118	$ 594,113	$ 536,434
% to Total	100.00%	100.00%	100.00%	100.00%
Adjusted EBITDA	$ 52,368	$ 41,137	$ 87,677	$ 65,876
North America
SEGMENT REPORTING
Number of Operating Segments | segment			1
International - Japan, Asia and Europe
SEGMENT REPORTING
Number of Operating Segments | segment			3
KATE SPADE North America
SEGMENT REPORTING
Net Sales	$ 271,378	$ 235,730	$ 490,055	$ 431,316
% to Total	84.90%	83.90%	82.50%	80.40%
Adjusted EBITDA	$ 47,393	$ 37,781	$ 71,980	$ 55,853
% of Sales	17.50%	16.00%	14.70%	12.90%
KATE SPADE International
SEGMENT REPORTING
Net Sales	$ 43,417	$ 40,718	$ 92,300	$ 93,186
% to Total	13.60%	14.40%	15.50%	17.40%
Adjusted EBITDA	$ 4,053	$ 3,433	$ 12,590	$ 8,422
% of Sales	9.30%	8.40%	13.60%	9.00%
Adelington Design Group
SEGMENT REPORTING
Net Sales	$ 4,896	$ 4,670	$ 11,758	$ 11,932
% to Total	1.50%	1.70%	2.00%	2.20%
Adjusted EBITDA	$ 922	$ (77)	$ 3,107	$ 1,601
% of Sales	18.80%	(1.60%)	26.40%	13.40%

SEGMENT REPORTING - Reconciliat

SEGMENT REPORTING - Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Apr. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
Reconciliation to Net Income (Loss)
Adjusted EBITDA	$ 52,368	$ 41,137		$ 87,677	$ 65,876
Depreciation and amortization, net	(11,436)	(10,872)		(22,157)	(22,418)
Charges due to streamlining initiatives, brand-exiting activities, acquisition related costs and loss on asset disposals and impairments, net	(638)	(7,899)		(844)	(26,953)
Joint venture contract termination fee			$ (26,000)		(26,000)
Share-based compensation	(8,246)	(6,753)		(16,156)	(12,756)
Adjusted equity loss included in Reportable Segments Adjusted EBITDA	2,007	1,933		3,248	2,671
Operating Income (Loss)	34,055	17,546		51,768	(19,580)
Other expense, net	(3,093)	(1,823)		(3,340)	(3,218)
Loss on settlement of note receivable					(9,873)
Interest expense, net	(4,937)	(5,344)		(9,933)	(8,708)
Provision for income taxes	1,466	1,130		3,020	2,931
Discontinued operations, net of income taxes	2,214	(708)		2,934	(2,370)
Net Income (Loss)	26,773	8,541		38,409	(46,680)
Joint venture restructuring expense included in equity losses		100			100
Restructuring Cost - Compensation
Reconciliation to Net Income (Loss)
Share-based compensation					(200)
KATE SPADE North America
Reconciliation to Net Income (Loss)
Adjusted EBITDA	47,393	37,781		71,980	55,853
KATE SPADE International
Reconciliation to Net Income (Loss)
Adjusted EBITDA	4,053	3,433		12,590	8,422
Adelington Design Group
Reconciliation to Net Income (Loss)
Adjusted EBITDA	922	(77)		3,107	1,601
Equity method investee
Reconciliation to Net Income (Loss)
Adjusted equity loss included in Reportable Segments Adjusted EBITDA	$ 2,000	$ 1,900		$ 3,200	$ 2,700

SEGMENT REPORTING - Geographic

SEGMENT REPORTING - Geographic data (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
GEOGRAPHIC DATA
Net Sales	$ 319,691	$ 281,118	$ 594,113	$ 536,434
% to Total	100.00%	100.00%	100.00%	100.00%
Domestic
GEOGRAPHIC DATA
Net Sales	$ 264,175	$ 229,597	$ 482,365	$ 427,181
% to Total	82.60%	81.70%	81.20%	79.60%
International
GEOGRAPHIC DATA
Net Sales	$ 55,516	$ 51,521	$ 111,748	$ 109,253
% to Total	17.40%	18.30%	18.80%	20.40%

DERIVATIVE INSTRUMENTS - Type (

DERIVATIVE INSTRUMENTS - Type (Details) - Foreign Currency Contract $ in Millions, ¥ in Billions	3 Months Ended		6 Months Ended
	Jul. 02, 2016USD ($)	Jul. 04, 2015USD ($)	Jul. 02, 2016USD ($)	Jul. 04, 2015USD ($)	Jul. 02, 2016JPY (¥)
Forward Contracts | Designated as Hedging Instrument
DERIVATIVE INSTRUMENTS
Forward contracts to sell foreign currency in exchange of U.S. dollars	$ 19.2		$ 19.2		¥ 2.1
Forward Contracts | Not Designated as Hedging Instrument
DERIVATIVE INSTRUMENTS
Forward contracts to sell foreign currency in exchange of U.S. dollars	49		49		5.1
Forward Contracts | Not Designated as Hedging Instrument | Other expense, net
DERIVATIVE INSTRUMENTS
Transaction losses related to derivative instruments reflected within Other expense, net	(3.1)	$ 1.1	(6.2)	$ 0.7
Option Contracts | Designated as Hedging Instrument
DERIVATIVE INSTRUMENTS
Forward contracts to sell foreign currency in exchange of U.S. dollars	$ 11.6		$ 11.6		¥ 1.3

DERIVATIVE INSTRUMENTS - Notion

DERIVATIVE INSTRUMENTS - Notional amount and FV (Details) - Foreign Currency Contract - USD ($) $ in Thousands	Jul. 02, 2016	Jan. 02, 2016	Jul. 04, 2015
Designated as Hedging Instrument | Other current assets
Asset Derivatives
Asset Derivatives, Notional amount	$ 11,637	$ 26,612	$ 42,012
Asset Derivatives, Fair value	8	1,017	2,770
Designated as Hedging Instrument | Accrued expenses
Liability Derivatives
Liability Derivatives, Notional Amount	19,200		3,000
Liability Derivatives, Fair Value	1,924		57
Not Designated as Hedging Instrument | Accrued expenses
Liability Derivatives
Liability Derivatives, Notional Amount	48,964	42,156	32,234
Liability Derivatives, Fair Value	$ 892	$ 354	$ 342

DERIVATIVE INSTRUMENTS - Gain L

DERIVATIVE INSTRUMENTS - Gain Loss (Details) - Designated as Hedging Instrument - Foreign Currency Contract - Cost of goods sold - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
Derivative instruments, Gain (Loss)
Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)	$ (1,694)	$ (213)	$ (2,818)	$ (792)
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Operations (Effective Portion)	$ 63	$ (199)	$ 407	$ 342

SHARE-BASED COMPENSATION - Expe

SHARE-BASED COMPENSATION - Expense (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
SHARE-BASED COMPENSATION
Share-based compensation expense	$ 8.2	$ 6.8	$ 16.2	$ 12.8
Restructuring Cost - Compensation
SHARE-BASED COMPENSATION
Share-based compensation expense				$ 0.2
Stock options
SHARE-BASED COMPENSATION
Vesting period			3 years
Contractual term			7 years

SHARE-BASED COMPENSATION - Opti

SHARE-BASED COMPENSATION - Options (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	6 Months Ended		12 Months Ended
	Apr. 02, 2016	Jul. 02, 2016	Jul. 04, 2015	Jan. 02, 2016
SHARE-BASED COMPENSATION
Vesting period		3 years
Contractual term		7 years
Valuation Assumptions:
Weighted-average fair value of options granted (in dollars per share)			$ 15.92
Expected volatility (as a percent)			76.50%
Weighted-average volatility (as a percent)			58.70%
Expected term (in years)			4 years 2 months 12 days
Risk-free rate (as a percent)			1.90%
Expected annual forfeiture (as a percent)			15.30%
Shares
Outstanding at the beginning of the period (in shares)	905,883	905,883
Exercised (in shares)		(37,500)
Cancelled/expired (in shares)		(1,370)
Outstanding at end of the period (in shares)		867,013		905,883
Vested or expected to vest at the end of the period (in shares)		843,103
Exercisable at the end of the period (in shares)		739,760
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 15.35	$ 15.35
Exercised (in dollars per share)		6.88
Cancelled/expired (in dollars per share)		35.30
Outstanding at the end of the period (in dollars per share)		15.68		$ 15.35
Vested or expected to vest at the end of the period (in dollars per share)		15.16
Exercisable at the end of the period (in dollars per share)		$ 12.49
Weighted Average Remaining Contractual Term
Outstanding at the end of the period		3 years		3 years 4 months 24 days
Vested or expected to vest at the end of the period		2 years 10 months 24 days
Exercisable at the end of the period		2 years 6 months
Aggregate Intrinsic Value
Outstanding at the beginning of the period (in dollars)	$ 5,686	$ 5,686
Exercised (in dollars)	$ 650
Outstanding at the end of the period (in dollars)		6,918		$ 5,686
Vested or expected to vest at the end of the period (in dollars)		6,918
Exercisable at the end of the period (in dollars)		$ 6,918
Additional disclosure
Nonvested stock options outstanding (in shares)		100,000
Weighted average grant date fair value per award for nonvested stock options (in dollars per share)		$ 15.91
Total unrecognized compensation cost related to nonvested stock options granted		$ 1,700
Weighted average recognition period of unrecognized stock-based compensation expense		1 year 8 months 12 days
Fair value of shares vested under stock option plans		$ 2,300

SHARE-BASED COMPENSATION - MSUs

SHARE-BASED COMPENSATION - MSUs (Details) - Market Share Units $ / shares in Units, $ in Millions	6 Months Ended
	Jul. 04, 2015USD ($)$ / sharesshares
Valuation Assumptions:
Weighted-average fair value (in dollars per share) | $ / shares	$ 43.35
Expected volatility (as a percent)	43.20%
Weighted-average expected annual forfeiture (as a percent)	5.00%
Minimum
SHARE-BASED COMPENSATION
Number of shares to be earned as a percentage of target amount	30.00%
Valuation Assumptions:
Risk-free rate (as a percent)	1.10%
Maximum
SHARE-BASED COMPENSATION
Number of shares to be earned as a percentage of target amount	200.00%
Valuation Assumptions:
Risk-free rate (as a percent)	1.70%
Key Executives
SHARE-BASED COMPENSATION
Granted (in shares) | shares	105,245
Grant date fair value (in dollars) | $	$ 4.6
Key Executives | Share-based Compensation Award, Tranche One
SHARE-BASED COMPENSATION
Vesting percentage	50.00%
Vesting period	2 years
Key Executives | Share-based Compensation Award, Tranche Two
SHARE-BASED COMPENSATION
Vesting percentage	50.00%
Vesting period	3 years

SHARE-BASED COMPENSATION - Perf

SHARE-BASED COMPENSATION - Performance Units (Details) - Performance Shares - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015
SHARE-BASED COMPENSATION
Granted (in shares)	452,922	243,419
Vesting period	3 years	3 years
Grant date fair value (in dollars)	$ 11.8	$ 9.1
Valuation Assumptions:
Weighted-average fair value (in dollars per share)	$ 25.99	$ 37.47
Expected volatility (as a percent)	42.50%	41.60%
Risk-free rate (as a percent)	1.00%	1.00%
Weighted-average expected annual forfeiture (as a percent)	3.60%	4.10%

SHARE-BASED COMPENSATION - Rest

SHARE-BASED COMPENSATION - Restricted Stock Awards (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015
Restricted stock awards
Shares
Nonvested stock at the beginning of the period (in shares)	1,924,250
Granted (in shares)	1,125,970
Vested (in shares)	(116,266)
Cancelled (in shares)	(52,382)
Nonvested stock at the end of the period (in shares)	2,881,572
Expected to vest at the end of the period (in shares)	2,624,100
Weighted Average Grant Date Fair Value
Nonvested stock at the beginning of the period (in dollars per share)	$ 44.31
Granted (in dollars per share)	24.19
Vested (in dollars per share)	38.84
Cancelled (in dollars per share)	46.19
Nonvested stock at the end of the period (in dollars per share)	36.63
Expected to vest at the end of the period (in dollars per share)	$ 37.18
Additional disclosures
Total unrecognized compensation cost related to nonvested stock awards granted under restricted stock plans	$ 45.7
Weighted average recognition period of unrecognized stock-based compensation expense	2 years
Fair value of shares vested under restricted stock plans	$ 4.5	$ 2.5
Market Share Units
Weighted Average Grant Date Fair Value
Nonvested stock at the end of the period (in dollars per share)		$ 43.35
Market Share Units | Minimum
Additional disclosures
Number of shares to be earned as a percentage of target amount		30.00%
Market Share Units | Maximum
Additional disclosures
Number of shares to be earned as a percentage of target amount		200.00%
Performance Shares
Shares
Granted (in shares)	452,922	243,419
Weighted Average Grant Date Fair Value
Nonvested stock at the end of the period (in dollars per share)	$ 25.99	$ 37.47
Performance Shares | Minimum
Additional disclosures
Number of awards granted depending on the Company's Total Shareholder Return ("TSR") relative to the TSR of the S&P Mid-Cap 400 Index (as a percent)	0.00%
Performance Shares | Maximum
Additional disclosures
Number of awards granted depending on the Company's Total Shareholder Return ("TSR") relative to the TSR of the S&P Mid-Cap 400 Index (as a percent)	200.00%