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Sticking to our handbag roots: Kate Spade CEO

Kate Spade CEO: Handbags anchor of business

Don't expect out-of-the-blue product lines bearing the Kate Spade New York label, CEO Craig Leavitt told CNBC, explaining that the company intends to remain focused on its core product line.

"We're a brand that is born and has great roots in the handbag and small leather good area, so that's always going to be the anchor of our business," he told CNBC's Melissa Lee on "Fast Money" on Wednesday. "As a penetration of the total, it is going to slowly decline just because we're adding new categories to round out our lifestyle presentation."

Leavitt made the comments a day after parent company Fifth & Pacific posted for the holiday quarter, largely on the strength of handbags from its Kate Spade division. Same-store sales increased 30 percent in the quarter that ended Dec. 28, according to Reuters.

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"The great news about that is we are now at about $1,265-a-square-foot productivity of our retail spaces, and that is now the 14th- consecutive quarter that we have grown that number in a meaningful way," Leavitt said.

Also Wednesday, Fifth & Pacific began trading under the ticker KATE on the New York Stock Exchange, switching from FNP.

Leavitt said that even amid strong competition from the likes of Michael Kors, Coach and Tory Burch, Kate Spade New York still has potential.

"We think we have a really long runway that we're really at the beginning of," he said. "I've said that I think we have a clear pathway toward about $4 billion at retail, and I'm very confident about that."

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Leavitt credited the fashion company's product lines for its success.

"We are really a lifestyle brand, and as we've introduced new product categories to the consumer, she's really embraced each of those categories," he said. "And so, I think that's really a competitive advantage that gives us an opportunity to continue to roll out new categories of business."

Keeping focused product lines will give the company an opportunity to grow organically, Leavitt added.

"We have one dedicated design and merchandising team that are very focused on having something that's consistent, that's really part of our DNA. And that really, I think, helps us avoid the pitfalls that maybe some others can fall into about having product that doesn't feel connected to one another," he said.

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.