Bag charms selling for $1,000 are retail's next little luxury
The commercial director from New Jersey began buying the embellishments a year ago and now owns 30, the most expensive being a $1,010 Louis Vuitton crab charm that doubles as a small pouch. 'You can mix and match and put it on different bags, so you're not limited to one specific style,' Diaz said.
Sales at luxury brands have been falling for several quarters, and companies are putting out more affordable and smaller accessories to reverse the slump and drive up store traffic.
Last month LVMH Moët Hennessy Louis Vuitton SE reported that second-quarter sales fell 9% in its key fashion and leather goods unit as shoppers reined in purchases of costly purses and clothing. Rival Kering reported that Gucci sales plunged 25% during the same period compared with a year earlier, while sales at Prada declined 3.6%.
Shares in the companies are all down double digits in the last 12 months, and consultancy Bain & Co. expects the personal luxury goods industry to shrink between 2% and 5% this year. That would be the worst performance since the 2009 global financial crisis if the pandemic is excluded.
Tapping into the viral bag charm craze is 'sensibly opportunistic' for luxury companies that might as well 'make some money off the back of it,' said Neil Saunders, managing director at analytics firm GlobalData.
Tapestry Inc., which has been outperforming top-tier labels thanks to strong sales at its attainable luxury brand Coach, has expanded its assortment of charms there and at Kate Spade. The company plans to significantly increase the number of pieces offered at Kate Spade, where sales have been falling, during the holiday season.
Unique bag charms provide 'an accessible way in' to the two brands, said Alice Yu, Tapestry's vice president of strategy and consumer insights.
Ultra-luxury brands have sold charms for years, but mainly as afterthoughts to big-ticket items. Many sold them online only. Now the charms are front and centre in boutiques and at fashion shows.
'If we don't get into this and lean into this, someone else will,' Saunders said of the prestige brands. And as some of their wealthy customers hold off on buying new purses and clothes, hooking them with a stylish bag charm helps maintain valuable client connections during a rough patch. 'The worst thing for a brand is to lose a consumer completely,' he said.
During recent visits to Bloomingdale's stores, statement charms were featured throughout the handbags departments. At the retailer's Manhattan flagship, Prada was showcasing its $825 black and gold robot charm attached to a $2,300 backpack. In Los Angeles, Gucci's $510 dragonfly-shaped keychain was clipped to one of the handles of a $1,950 handbag, and three dog-shaped charms, $450 each, were lined up in a display case alongside monogram card holders and wallets.
Although bag charms are booming, industry analysts caution that they can only bolster luxury brands to a point.
Ultimately, charms 'will make up a very small portion' in sales for premium fashion labels, said Bloomberg Intelligence analyst Deborah Aitken. 'Enough to keep brands active in the minds of potential shoppers, but at very limited total value.'
Louis Vuitton and Loewe declined to comment on their bag charm strategies or provide sales figures. Gucci and Fendi did not respond to requests for comment.
Klevisa Hendrix, a 27-year-old content creator from Los Angeles, began buying bag charms this year after seeing them on the Coach runway and now has a dozen in her growing collection. She typically spends less than $100 on a single charm. 'You want to be fashionable,' she said, 'but you want to still be able to afford fashion.'
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Fashion Network
2 days ago
- Fashion Network
Bag charms selling for $1,000 are retail's next little luxury
Ethan Diaz, 24, used to splurge regularly on high-priced purses and streetwear that he would barely use. Now, bag charms enable him to quickly switch up the look of his purses without blowing his budget. He recently dressed up his $695 Coach Soft Empire Carryall Bag with a handful of eclectic charms, including a $120 Longchamp keyring in the shape of a croissant. The commercial director from New Jersey began buying the embellishments a year ago and now owns 30, the most expensive being a $1,010 Louis Vuitton crab charm that doubles as a small pouch. 'You can mix and match and put it on different bags, so you're not limited to one specific style,' Diaz said. Sales at luxury brands have been falling for several quarters, and companies are putting out more affordable and smaller accessories to reverse the slump and drive up store traffic. Last month LVMH Moët Hennessy Louis Vuitton SE reported that second-quarter sales fell 9% in its key fashion and leather goods unit as shoppers reined in purchases of costly purses and clothing. Rival Kering reported that Gucci sales plunged 25% during the same period compared with a year earlier, while sales at Prada declined 3.6%. Shares in the companies are all down double digits in the last 12 months, and consultancy Bain & Co. expects the personal luxury goods industry to shrink between 2% and 5% this year. That would be the worst performance since the 2009 global financial crisis if the pandemic is excluded. Tapping into the viral bag charm craze is 'sensibly opportunistic' for luxury companies that might as well 'make some money off the back of it,' said Neil Saunders, managing director at analytics firm GlobalData. Tapestry Inc., which has been outperforming top-tier labels thanks to strong sales at its attainable luxury brand Coach, has expanded its assortment of charms there and at Kate Spade. The company plans to significantly increase the number of pieces offered at Kate Spade, where sales have been falling, during the holiday season. Unique bag charms provide 'an accessible way in' to the two brands, said Alice Yu, Tapestry's vice president of strategy and consumer insights. Ultra-luxury brands have sold charms for years, but mainly as afterthoughts to big-ticket items. Many sold them online only. Now the charms are front and centre in boutiques and at fashion shows. 'If we don't get into this and lean into this, someone else will,' Saunders said of the prestige brands. And as some of their wealthy customers hold off on buying new purses and clothes, hooking them with a stylish bag charm helps maintain valuable client connections during a rough patch. 'The worst thing for a brand is to lose a consumer completely,' he said. During recent visits to Bloomingdale's stores, statement charms were featured throughout the handbags departments. At the retailer's Manhattan flagship, Prada was showcasing its $825 black and gold robot charm attached to a $2,300 backpack. In Los Angeles, Gucci's $510 dragonfly-shaped keychain was clipped to one of the handles of a $1,950 handbag, and three dog-shaped charms, $450 each, were lined up in a display case alongside monogram card holders and wallets. Although bag charms are booming, industry analysts caution that they can only bolster luxury brands to a point. Ultimately, charms 'will make up a very small portion' in sales for premium fashion labels, said Bloomberg Intelligence analyst Deborah Aitken. 'Enough to keep brands active in the minds of potential shoppers, but at very limited total value.' Louis Vuitton and Loewe declined to comment on their bag charm strategies or provide sales figures. Gucci and Fendi did not respond to requests for comment. Klevisa Hendrix, a 27-year-old content creator from Los Angeles, began buying bag charms this year after seeing them on the Coach runway and now has a dozen in her growing collection. She typically spends less than $100 on a single charm. 'You want to be fashionable,' she said, 'but you want to still be able to afford fashion.'
Fashion Network
2 days ago
- Fashion Network
Bag charms selling for $1,000 are retail's next little luxury
Ethan Diaz, 24, used to splurge regularly on high-priced purses and streetwear that he would barely use. Now, bag charms enable him to quickly switch up the look of his purses without blowing his budget. He recently dressed up his $695 Coach Soft Empire Carryall Bag with a handful of eclectic charms, including a $120 Longchamp keyring in the shape of a croissant. The commercial director from New Jersey began buying the embellishments a year ago and now owns 30, the most expensive being a $1,010 Louis Vuitton crab charm that doubles as a small pouch. 'You can mix and match and put it on different bags, so you're not limited to one specific style,' Diaz said. Sales at luxury brands have been falling for several quarters, and companies are putting out more affordable and smaller accessories to reverse the slump and drive up store traffic. Last month LVMH Moët Hennessy Louis Vuitton SE reported that second-quarter sales fell 9% in its key fashion and leather goods unit as shoppers reined in purchases of costly purses and clothing. Rival Kering reported that Gucci sales plunged 25% during the same period compared with a year earlier, while sales at Prada declined 3.6%. Shares in the companies are all down double digits in the last 12 months, and consultancy Bain & Co. expects the personal luxury goods industry to shrink between 2% and 5% this year. That would be the worst performance since the 2009 global financial crisis if the pandemic is excluded. Tapping into the viral bag charm craze is 'sensibly opportunistic' for luxury companies that might as well 'make some money off the back of it,' said Neil Saunders, managing director at analytics firm GlobalData. Tapestry Inc., which has been outperforming top-tier labels thanks to strong sales at its attainable luxury brand Coach, has expanded its assortment of charms there and at Kate Spade. The company plans to significantly increase the number of pieces offered at Kate Spade, where sales have been falling, during the holiday season. Unique bag charms provide 'an accessible way in' to the two brands, said Alice Yu, Tapestry's vice president of strategy and consumer insights. Ultra-luxury brands have sold charms for years, but mainly as afterthoughts to big-ticket items. Many sold them online only. Now the charms are front and centre in boutiques and at fashion shows. 'If we don't get into this and lean into this, someone else will,' Saunders said of the prestige brands. And as some of their wealthy customers hold off on buying new purses and clothes, hooking them with a stylish bag charm helps maintain valuable client connections during a rough patch. 'The worst thing for a brand is to lose a consumer completely,' he said. During recent visits to Bloomingdale's stores, statement charms were featured throughout the handbags departments. At the retailer's Manhattan flagship, Prada was showcasing its $825 black and gold robot charm attached to a $2,300 backpack. In Los Angeles, Gucci's $510 dragonfly-shaped keychain was clipped to one of the handles of a $1,950 handbag, and three dog-shaped charms, $450 each, were lined up in a display case alongside monogram card holders and wallets. Although bag charms are booming, industry analysts caution that they can only bolster luxury brands to a point. Ultimately, charms 'will make up a very small portion' in sales for premium fashion labels, said Bloomberg Intelligence analyst Deborah Aitken. 'Enough to keep brands active in the minds of potential shoppers, but at very limited total value.' Louis Vuitton and Loewe declined to comment on their bag charm strategies or provide sales figures. Gucci and Fendi did not respond to requests for comment. Klevisa Hendrix, a 27-year-old content creator from Los Angeles, began buying bag charms this year after seeing them on the Coach runway and now has a dozen in her growing collection. She typically spends less than $100 on a single charm. 'You want to be fashionable,' she said, 'but you want to still be able to afford fashion.'
Fashion Network
2 days ago
- Fashion Network
Tapestry plummets with tariff costs weighing on profit outlook
Tapestry Inc.'s annual outlook for a key profit metric missed analysts' forecasts due in part to tariffs, a sign that Wall Street is still adjusting to the full cost of duties for US companies. The owner of Coach and Kate Spade said it's expecting earnings per diluted share between $5.30 to $5.45 in the current fiscal year. That would be a 4% to 7% increase versus the prior year. Analysts in a Bloomberg survey were expecting the profit metric to reach $5.49. The difference likely lies in tariffs. Tapestry's EPS outlook includes a negative impact of 60 cents from higher duties, the company said in a statement Thursday. It's not clear that Wall Street has fully accounted for those costs. Shares of Tapestry fell 17% in premarket trading. The stock had gained about 74% this year through Wednesday's close. That hit tariffs represents about $160 million in extra costs in the current fiscal year, Chief Financial Officer Scott Roe said in an interview. The 'new information' on tariffs, he said, will have a 'significant' effect in the current fiscal year. Still, Tapestry has 'strong confidence in our ability to mitigate the impact of tariffs over time.' The handbag maker's outlook for the year is 'prudent given the backdrop,' Roe added. Tapestry is forecasting revenue of nearly $7.2 billion in the current fiscal year that's expected to end in June, slightly above analysts' expectations of $7.12 billion. That excludes sales from shoe brand Stuart Weitzman, which Tapestry sold after it didn't generate much revenue. That figure would be a mid-single-digit percentage increase in sales versus the prior year, the company said. Offloading Stuart Weitzman will enable Tapestry executives to spend more time and resources on increasing sales at Coach and turning around Kate Spade. Revenue at Coach rose 13%, excluding currency fluctuations, and fell 13% at Kate Spade in the most recent quarter that ended on June 28. 'Coach outperformance continues,' Tapestry Chief Executive Officer Joanne Crevoiserat said in the interview. 'We're well ahead of the industry and we're doing that at exceptional margins.' Sales at Coach have accelerated in the current quarter, she added. At Kate Spade, Crevoiserat said, 'the work to reset the brand is underway.' Coach was listed as the fifth hottest fashion brand as of June, according to the closely watched Lyst Index. Its Tabby and Brooklyn bags are top sellers and have been spotted on celebrities, while its cherry bag charm is a popular and less expensive purchase for shoppers. Most of the brands at the top of the Lyst Index are European fashion houses such as Miu Miu, Loewe, Prada and Moncler. Coach and Ralph Lauren, at No. 11, are among the few US names on the list and have been able to successfully compete with more expensive European luxury labels even as the two companies have consistently raised prices in recent years. Both brands' prices are cheaper than many of their European peers, which makes their high-end products more accessible to a wider range of shoppers, helping to boost sales, executives have said. The brands' popularity 'suggest a healthy outlook to support market-share gains and operating margin via full-price sales, even amid increased price sensitivity, low consumer confidence and tariff risk,' Bloomberg Intelligence analysts Deborah Aitken and Andrea Ferdinando Leggieri wrote in a recent research note.
