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09 October, 2018 -
I read recently that handbags were one of the earliest items of fashion. Men carried them first and the satchel even gets mentioned in the Bible. You had to carry your seeds, medicines, coins and lunch somehow.
It did not take long after ladies began to carry them for them to be nicknamed “indispensables’” and things got serious when public transport, especially the trains, made for much increased mobility. It was at that time that the handbag was born and it has remained important ever since; no more so than in the 21st century.
In 2003 accessories made up 18% of the total global luxury market but by the end of 2014, according to Luca Solca, head of luxury goods at Exane BNP Paribas, they had jumped to almost 30% - and “mostly this growth is driven by handbags”.
The great thing about a handbag or a man-bag is that your shape and size does not matter, and they can be mixed and matched with clothing to suit any occasion or activity. For the brands they offer some of the biggest margins in the luxury category without the need for changing rooms or holding stock in multiple sizes. And they sell well making great use of shop floor space.
The problem with success is that everyone wants a share of it. This ran alongside consumer confusion about what luxury means. It used to be associated with exclusivity, rareness, high quality and a very high price. Yet when Louis Vuitton began putting stores in every major airport and many High Streets it was hard to say they were difficult to access. So to get back to their exclusive roots some of the top luxury brands have started to raise prices, accepting a reduction in volume as a cost of retaining brand integrity. Below them we have the brands whom I have always argued should market on quality and design rather than "affordable" or "accessible" luxury. I did not buy my Coach bag in 1987 because I wanted luxury. I wanted a top quality, very well made leather bag to carry my files (no laptops in those days) and that is what I got. It has never needed a repair and I will take it to work today just as I have almost every day since I bought it.
A shock to learn, therefore, that Wells Fargo analyst Paul Lejuez estimates "that four out of five handbags sold by Coach are coming out of the factory stores,” At the beginning of the concept of out-of-town discounters Coach did an expert job of segmenting its and finding entirely separate Coach fans for its Outlet stores. Older customers who did not get down town and were not attracted by the younger city styles. But that separation appears to have gone and it has just made Coach ubiquitous. Can brands like Coach be luxury if everyone owns one? That was, and remains the question.
The fact that there is huge space now under the $1500 ceiling offers great opportunities for great products and a variety of brands, but it is a crowded place where you need to know where you are positioned. Design, quality, luxury, or just featuring totes for working women and small bags for the young.
Arrival of gadgets
Certainly the arrival of gadgets, Tablets and Smartphones, has meant the balance between function and fashion has swung somewhat back towards function, especially with many more joining the workforce. Old designs, crafted out of great leathers are being searched for in the museums and history books. Suddenly they have a contemporary feel about them.
So there is no reason to think the market will decline. But the consumer is in control, even in China where consumer knowledge has greatly increased. They do not shop blindly by brand name but more by design and quality. They objected to being sold an expensive bag in logo printed textile that was previously leather. And some of the most popular are those whose define features are more likely to be obvious than their logo. Not that this offers complacency to the tanners. While plastics do not provide any feel of quality and wear out quickly, new designs using canvas and other materials mixed with leather are doing well in some categories.
The ancient Egyptians used linen for their bags and gloves. We cannot forget that designers today have an even wider choice.
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