Kate Spade struggles with declining sales as shoppers stumble on moderately priced designer purses in favor of used premium quality handbags that will cost two or three times as much new.
The brand's sales in stores that have opened at least one year, a retail target, fell 16 percent in the three months through September, parent company Tapestry said on Tuesday that the net revenue of the New York-based company, which also owns Coach and Stuart Weitzman , fell to $ 20 million, or $ 0.1[ads1]0 per share, according to a statement.
Revenue at Michael Kors, which was once in demand for carrying bags with the signature MK logo and large statement watches, is also changing consumer tastes. Sales fell less than 5 percent over the three months through June, parents Capri Holdings said in a statement, and it will update investors on Wednesday about its financial performance through September
|TPR||TAPESTRY INC.||27.40||+0.88||+ 3.32%|
|CPRI||CAPRI HOLDINGS LTD||34.20||+0.91  + 2.73%|
Handbags and tote sales in the US have fallen more than 20 percent during the first eight months of 2019, compared to three years ago, according to market research firm NPD Groups Consumer Tracking Service.
The second-hand luxury bag market is booming in the meantime. RealReal, an online marketplace for resale of luxury handbags, clothing and jewelry, reported that sales increased 55 percent to $ 80.5 million, from $ 51.8 million a year ago, with the average order value at $ 438 compared to $ 418 in 2018, the company said.
And Poshmark, a marketplace for new or used clothing, shoes and accessories, reported that website designer handbags sales increased 53% in 2019, with top-selling luxury brands including Louis Vuitton, Gucci, Chanel and Burberry. Many originally sold for $ 3000 or more
The site even offers Posh Authenticate, a free service that ensures bags that cost more than $ 500 are not forged.
"The growing resale segment is both a treat and an opportunity for the purse market, and I expect rentals will gain traction in bags over the next few years," said OD analyst Beth Goldstein, in a report.  Shoppers not only want a bag of logo, she added, looking at the brand's commitment to social and environmental issues, as well as quality, function and versatility.
LUXURY HANDBAGS GET GREAT RETURN ON THE INVESTMENT
Kate Spade, founded in 1993, became an instant hit among Baby Boomers and Gen Xers who saw the elegant shoulder bags as a status symbol. In 1998, the company rolled in $ 28 million a year in revenue, establishing itself as "it "for working women, attracted by the moderate price point, between $ 100 and $ 400. At that time Coach was the only major competition.
GET THE FOX BUSINESS ON THE GOING CLICK HERE