Handbag brands fail to launch enough fresh styles: Analyst

In reaction to waning demand, many prominent handbag brands are cutting back on the number of styles they are introducing. But industry experts believe that such a move is affecting their ability to boost the already sluggish sales.

According to a recent report by Edited, a UK-based fashion and retail analytics firm, industry giants Michael Kors, Prada, LVMH's Louis Vuitton and Burberry have reduced the number of creative releases in the final three months of 2016, making it difficult for them to recapture consumer interest.

"There's a feeling of doom out there in the industry. Everything is defensive and not offensive," said New York-based luxury consultant Milton Pedraza in an interview with Bloomberg. "What you're seeing is a tremendous amount of copying, less innovation and less creativity, at a time when exactly what you need is to be bold."

In the US, demand for luxury goods took a hit last year due mainly to the rising value of the dollar and global economic downturn. Tourism, which is a big source of luxury spending, was likewise affected adversely by threats of terrorism. These factors have driven down shares of many upscale brands.

Handbag selections from several high-end labels were conspicuously smaller at many stores during the Christmas shopping season. In the last quarter of 2016, the number of styles launched by Michael Kors dropped 24 percent from the preceding three months. At Prada and Louis Vuitton, figures were down 35 percent while Burberry introduced 8 percent fewer new designs during the period.

"Rolling out the right number of styles is no easy task. Brands need to strike a careful balance between creating a glut of inventory, so-called dead stock, while ensuring there's enough trendy, new merchandise to entice consumers," said Katie Smith, senior fashion analyst at Edited. "Dropping newness too low could certainly threaten sales," she added.

According to Edited, a few brands, including Kate Spade and Ralph Lauren, introduced more new designs in the fourth quarter but still failed to bolster sales.

Younger consumers demand for faster availability of the latest trends and the shift of their preference from bags to shoes and jewerly are likewise proving a great challenge for most handbag makers.

In a recent study by UK-based market intelligence company Euromonitor, sales growth in the handbags sector is estimated to decelerate to 3.1 percent by 2020, from 16 percent in 2012. The slowdown has prompted many brands to diversify their selections, with Michael Kors branching out into menswear and Kate Spade launching a houseware collection.

Some retailers, meanwhile, opt to augment in-store experience in a bid to boost sales. Coach, for instance, is letting customers design their own bags at its flagship store in Fifth Avenue, New York. The brand also opened an adjacent store for its Stuart Weitzman shoe label, which it acquired in 2015.