The handbag industry, rocked by slowing department-store traffic and a shift away from purses by millennials, has a new mantra this holiday season: Do more with less.
Luxury retailers such as Nordstrom Inc., Bloomingdale’s and Barneys New Yorkare introducing far fewer styles of handbags this year as the critical Christmas season approaches. And the pressure on the industry has fuelled speculation that companies like Coach Inc. and Michael Kors Holdings Ltd. should find merger partners rather than fight it out alone.
Retailers are increasingly opting to differentiate themselves from competitors by introducing fewer new lines rather than swamping shoppers with too many choices, said Katie Smith, senior fashion analyst at Edited, a data-analytics company for the fashion industry.
“Reducing the number of products, making sure they are choosing their products really smartly, can help make sure they’re getting full-price sales rather than discount,” Smith said.
In the three months through Aug. 31, the number of new handbags introduced by Nordstrom and Bloomingdale’s fell 23 percent and 3 percent, respectively, compared with an increase of 5 percent and 11 percent the year before, according to Edited, whose clients include Ralph Lauren Corp. and luxury e-tailer Net-a-Porter. Barneys rolled out 41 percent fewer new lines in the third quarter of this year, compared with a 46 percent increase in 2015.
Coach, Michael Kors and Kate Spade & Co. are cutting back on sales to department stores, trying to avoid the record promotions that have hurt their brand cachet. When luxury retailers begin releasing their earnings on Tuesday, attention will be focused on how successful they have been in curbing discounting and coping with waning handbag demand.
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