When did everyone stop buying handbags? It seemed like every week, a new It bag was selling out, from bucket bags to leather satchels. Now, handbag sales are so low that retailers must drastically cut costs or expand into other categories.
Business of Fashion reports that sluggish sales have led to “higher levels of leftover Kate Spade, Coach and Michael Kors products that will need to be discounted to make way for newer goods.” Both Kate Spade and Michael Kors’ third quarter net sales fell below analyst predictions.
To cope with lower sales, all three brands are venturing into other categories: Coach bought shoe brand Stuart Weitzman and produced its first women’s runway show, Kate Spade is setting its sights on home goods and Michael Kors is leaning toward watches, sunglasses and accessories. But will they abandon handbags altogether?
To be fair, shoppers still love handbags but they’re choosing small clutches, wallets and crossbody bags over larger (and more expensive) totes. Topeka Capital Markets analyst, Dorothy Lakner explains, “There’s been this myth that no one is buying handbags anymore, but really it’s a change in trend away from the big totes everyone was buying a few years ago to smaller bags that don’t cost as much.”
The trend toward small bags may actually hurt shoppers in the end. Take Kate Spade, for example, a brand that relies on handbag sales for 70% of its revenue. We regularly enjoy its surprise 75% off sales but now, since handbag revenue is low, the brand is becoming increasingly focused on full price purchases, reports WWD. The promotions that consumers have come to love will now be few and far between.
Can we all agree to start buying totes again?