The handbag market grew for several years, fueled by the rapid rise of brands such as Michael Kors. More recently, however, sales have been declining. Luxury handbag makers have been experiencing ups and downs as they struggle to stay relevant.
Demand for handbags has been declining for multiple reasons. The market has become saturated with luxury brands, which has made them lose their exclusive status and appeal for many consumers. The categories of athleisure and designer footwear have been growing. That has reduced the amount of money that consumers are spending on handbags and has caused problems for many brands.
Vera Bradley recently delivered better-than-expected results, but it has not fully recovered from prior losses. The company beat its revenue projections by $5.7 million and raised its guidance for the full year. However, its stock is still down 35 percent year-to-date. Earnings were down 21 percent compared to the same period in 2014, and revenue rose just 1.5 percent. Comparable store sales, including e-commerce, dropped 15 percent for the period. They fell 16.9 percent in the previous quarter and 5.3 percent last year. Vera Bradley expects its full-year earnings to be down about 25 percent.
Michael Kors experienced several weak quarters, but more recent results are somewhat encouraging. In the first quarter, revenue climbed 13.4 percent on a constant currency basis. It seems that this was due to new store openings. Overall comps declined by 9.5 percent.
Coach is trying to turn things around, but so for the results it is seeking have not materialized.
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