High-end fights to get sales in the (hand)bag

Luxury giants know shoppers are more discerning and are making arm candy more exclusive

The cleaner has one, the checkout girl at Tesco has one, the local hairdresser has two. The patterned arm candy sold by Louis Vuitton, Gucci and other big fashion names is nowadays so common - with all the connotations that word carries with it - that it has forced the luxury goods giants to do something drastic.

Traditionally selling its bog-standard handbags for around £500, Louis Vuitton is now about to launch a range that includes "hyper-luxe" - with price tags rumoured to be upwards of $31,500 (£19,200) to $40,000.

The luxury giants have seen the warning signs for months. Louis Vuitton, which sells more than four million bags a year, has been reporting a sales growth slowdown for the past two years. The previous 20 per cent a year enjoyed by most companies in the sector cannot be sustained.

So what has changed? Most of the demand for these big brands had been fuelled by developing markets, especially in Asia. But shoppers there have become more sophisticated.

Imran Amed, founder of fashion website The Business of Fashion, said: "There will always be some consumers, particularly those early on in their consumption of luxury goods, who will be attracted to visual signifiers such as logos and icons which act as outward signs of their status and wealth.

"But as luxury brands become more and more ubiquitous - in a way becoming more akin to mass consumer brands themselves - discerning consumers are rejecting logos and looking for something discreet, either more subtle signifiers for those 'in the know' or no logos at all."

The true high-end shoppers have gone off the logo-heavy handbags because they don't appear to be special any more -  and they have been heavily copied and counterfeited.

Not only that, but some savvy shoppers still willing to splash the cash have realised that rather than spend £600 or more on a plastic "big-name" handbag they can pick up a reasonable product from the likes of US designers Coach or Michael Kors or France's Longchamp for more like £300 and these companies have benefited from the shift.

One fashion expert said: "Discerning consumers are also making it quite obvious that the price barrier to entry is not that strong any more" meaning "cheaper" labels are gaining traction in the style stakes too.

The luxury sector is polarising – just like every other part of the consumer or retail industry. Shoppers want value or they want to pay for good quality.

Gone are the days when a company could whack their logo on a plastic bag made in a Chinese factory and sell it for hundreds of pounds.

The truly wealthy luxury consumers, Mr Amed says "are more concerned with quality and having something that is truly special, bespoke or made only for them".

But the balance between exclusive products and making money is fine for many of the high-end brands.

Erwan Rambourg, an expert in luxury goods at HSBC, published a report this week called "multi-baggers" and said the sector is in flux.

Previously brands could "recruit the new luxury customer when he/she starts to be able to afford luxury products as their logo is seen as an easy way to display social status. But this has changed, especially in Asia".

Mr Rambourg warned the big brands have a struggle on their hands, adding: "Chinese consumption has entered the 'French paradox' - how to create the illusion of scarcity to sell more of what is supposed to be exclusive and appeal to consumers who want to be in the know."

Louis Vuitton has reacted by hiring a whole new team. Owner Bernard Arnault's daughter Delphine joined as executive vice president last year and accessories guru Darren Spaziani was drafted in to reinvigorate the collection.

Those who have prospered as tastes change include Bottega Veneta, owned by Paris-based Kering, which is also the parent company of Gucci. Its products carry no logo whatsoever but have a price tag of around £2,200. Hermès sells hardly any non-leather bags and it controls supply - there is a two-year waiting list for its Kelly and Birkin bag.

As the big corporates vie for customers the accessories designers are now calling the shots. British designers Katie Hillier and Luella Bartley were last year appointed at US label Marc by Marc Jacobs, Coach poached Loewe designer and British-born Stuart Vevers, while the fashion world awaits news of who will take over Emma Hill's old job at British brand Mulberry.

Handbags are about to steal the fashion show from the clothes.

Crocs, rocks and metals are all the rage for hyper-luxe punters

The list of some of the world's most expensive handbags include exotic skins, rare jewels and precious metals:

Geranium Porosus Petit H Hermès sold at an auction (second hand) last year for $125,000

Alligator Day Luxe Tote by The Row from Barneys cost £24,218

Soft stirrup crocodile shoulder bag Gucci – £21,440

Leiber Precious Rose bag with diamonds, sapphires and 18-carat white gold – $92,000

Nancy Gonzalez Porosus with lizard skin sold for $30,000

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee