NY Times Article : Is This It for the It Bag? by Eric Wilson
source | nytimes
November 1, 2007
Everyone's talking about the bubble, and when it will burst.
There is too much inventory. Prices are absurdly high. And analysts are predicting a slowdown in a market that may have already passed its peak of irrational growth, in 2004. Even as prices have increased exponentially over the last three years, with buyers trying to get in on the ground floor of premier properties — the Paddington, the Muse, the Giant City — so, too, have reports of dwindling consumer confidence and a looming credit crisis that could potentially wipe out the value of Uptowns and Downtowns alike.
Some people are concerned that a combination of volatile interest rates and the weakened dollar will ultimately cripple the market.
Status handbags, you see, are a lot like housing. After the rise of the $1,000 purse, fashion’s equivalent of the $1 million studio, there inevitably comes talk of a backlash. Are we now living in a handbag bubble?
“The new condo market today is comparable to the It bag,” said Stephanie Phair, the vice president for merchandising for Portero, an online auction house that specializes in the resale of luxury goods. “Every bag has a name. At least in New York, you see the same thing with all those condo buildings going up with valets, pools, dog parks and fancy names. At some point, people are going to decide that, in fact, what they’d like is to go back to the tried and tested, the classic prewar or the apartment on lower Fifth Avenue.”
“The appeal of the It bag,” Mr. Phair said, “has started to wane.”
Yet this is a moment when every bag seems to have, in addition to a price tag that could be confused with a ZIP code, a name that conjures up images of a wealthy enclave or a cast member of “Gossip Girl.” Heloise, Mathilde and Beata are bags by Chloé; Mariah, Camila and Elsa come from Marc Jacobs; the Uptown, the Downtown and the Muse are designs from Yves Saint Laurent, not buildings by André Balazs.
An entire genre of slouchy handbags, described as “hobos,” may even strike some readers as unintentionally funny, if not slightly offensive, with their earnest descriptions and indiscreet prices — the Dolce & Gabbana Miss Perfect hobo, $795; the Celine Bittersweet hobo, $1,700; the Prada nappa gauffre Antic hobo, $1,750 (a crazy gopher hobo?) — for bags meant to look as if they once belonged to tramps.
“Designers are just testing the laws of economics by pricing handbags higher and higher until people stop buying them,” said Lauren Goodman, the fashion director of Domino magazine. “They are so expensive, and drive you to buy a new one every season, which is kind of a horrifying thought.”
Ms. Goodman is aware of the hot bags of the moment: the Prada leather styles that repeat the ombré patterns of the fall collection; the Marc Jacobs oversize clutch, carried by several editors during the spring collections; the YSL Downtown bag, which is shaped like a Chinese takeout container with a handle. “Some people still carry the Muse,” she said of another YSL style. “They think the Muse is hot, because they’re kind of behind.”
But how does one afford to stay ahead?
At the rate that designers are introducing new styles, that no longer seems possible, which has led to a shift in perceptions about status bags.
“That whole phenomenon has changed,” said Julie Gilhart, the fashion director of Barneys New York. “Our customers seem to be looking for something more interesting. They don’t want to spend money on something everyone else has.”
They don’t want a one-season bag.
At the least, there is anecdotal evidence that the fastest-growing segment of the fashion industry, also considered its most lucrative because of its high profit margins, may not be immune to market exhaustion.
Coach, the leading American handbag company, reported last month that its profit growth may slow this holiday season, setting off jitters among investors who view the brand as the entry-level threshold for luxury goods and an indicator for the broader health of the market. One could not avoid the sense of dread reflected in a Women’s Wear Daily headline this week: “A Chilly Wind Blows: Retailers Are on Edge About Holiday Season.”
Handbag sales in the $7 billion United States market are expected to increase by 15 percent this year, according to the stock research firm Telsey Advisory Group. This is considered a disappointment, because the growth is about half as strong as the category’s 28 percent gain in 2004.
“That $5,000 Marc Jacobs bag is so yesterday’s news,” said Elizabeth Kiester, the chief creative director of LeSportsac, which is developing a line of bags with Stella McCartney that will sell for under $350, beginning in February. “The luxury market is so over the top now that it is demented. I call them limo bags. I don’t have a limo.”
It is probably a stretch to equate the slowing growth of handbag sales to It bag fatigue, but the statistics cited in Dana Thomas’s book, “Deluxe: How Luxury Lost Its Luster,” indicate that the American population is currently over-accessorized. Ms. Thomas cites a survey that showed by 2004, the average American woman was buying more than four handbags a year.
Ms. Phair, of Portero, said there is not a strong resale market for fashion bags of the moment. “It’s not that we wouldn’t touch a Vuitton Murakami, but now it would be purchased by someone with a collector’s perspective, who loves Louis Vuitton and wants to own pieces from every season,” she said.
In some circles, status bags have already become a punch line. A label called Slow and Steady Wins the Race recently produced a series of $100 handbags that recreated the shapes of iconic designs using inexpensive canvas — “a visual hyperbolic expression about contemporary fashion’s attention and obsession with designer handbags,” says its Web site.
The latest versions are hybrids: the Hermesbirkin-Dior (a saddlebag with Birkin-style handles), the Balenciaga-Chanel (where hardware meets quilting) and the Chanel-Asfour-Gucci (a circular quilted bag with a red-and-green stripe).
One is tempted, then, to declare an end to the It bag, but, then again, there were a lot of bags at the spring collections that seem destined for stardom: the Richard Prince bags at Vuitton, the Duffy at Marc Jacobs, the cute wavy-striped bags at Prada. Ken Downing, the fashion director at Neiman Marcus, is amused that there is even a question of a handbag bubble.
“We certainly believe our customer is a fashion enthusiast, and our customers love handbags,” he said.
At Neiman, the average bag sells for about $1,200, but Mr. Downing said there is no price resistance for a pièce de résistance. A special edition of 25 Chanel bags, made in crocodile for the retailer’s 100th anniversary last month, sold out in a snap. The price of each bag was $25,000.
I love how the lady at Lesportsac calls other designer bags "limos".. meanwhile she's charging $350 for a nylon Stella Mccartney bag. For her sake, I hope these new Stella Mccartney bags have some substance to them.
...and I will be strong even when it all goes wrong.
thanks for posting this interesting article MMA...
One is tempted, then, to declare an end to the It bag, but, then again, there were a lot of bags at the spring collections that seem destined for stardom: the Richard Prince bags at Vuitton, the Duffy at Marc Jacobs, the cute wavy-striped bags at Prada.
i was never part of the IT bag phenomenon...
but i think there will always be a market for these things..
just maybe not as big a market as in recent months/years...
there is always an ebb and flow...
but certain bags will always retain their appeal and their value...
and some women just have a 'thing' for bags...
it's just a 'thing'...you know?...
"It is not money that makes you well dressed: it is understanding."