As sales of purses plummet, lingerie on the rise
January 27, 2016 by admin
Filed under Latest Lingerie News
Are women covering up their latest obsession?
As a decade-long love affair with handbags cools, women have been increasingly scooping up lingerie items, leading some industry watchers to wonder if lingerie is the new handbag.
That is, women might now be satisfying their guilty urge for luxury-retail purchases with intimate apparel instead of handbags.
Sales figures and stock prices are painting a provocative picture that backs up the trend.
On Tuesday, handbag icon Coach Inc. reported a 4 percent decline in same-store sales in North America for the three months ended Dec. 26.
Globally, Coach brand sales sank by 7 percent over the same period. But Coach is hardly alone.
Handbags were among the biggest bargains over the holiday shopping season as they were heavily discounted — even at premium department stores like Nordstrom and Bloomingdale’s — according to Credit Suisse apparel analyst Christian Buss, who tracked promotional activity over the period.
“For 10 years, handbags were growing faster than the overall apparel market,” Buss said, “but retailers are saying now that bags are growing at about the same rate as their overall sales — in the low single digits. We remain concerned about underlying demand in the handbag category.”
The stock prices for many of the once-hot bag purveyors are depressed over the past 12 months, including: Michael Kors, down 45 percent; Coach, down 11 percent; Prada, down 49 percent; and Kate Spade, down 42 percent.
If the slowdown in sales is sparked by too many handbags in the closet, perhaps that handbag cash is being spent on lingerie.
L Brands, owner of Victoria’s Secret and Pink, saw its shares spike 12 percent over the last 12 months — and same-store sales at Aerie, the lingerie division of American Eagle, have been soaring, spurring the teen retailer to invest in doubling the size of the business this year.
The Aerie and Pink brands are going head-to-head like never before with each opening more stores.
L Brands crowed that December was its “best ever” holiday period, with same-store sales increasing 8 percent.
“The intimate category has been taking some share from handbags,” said Richard Church, managing director of Discern Investment Analytics.
“The intimate category is a little lower price-point, but it’s still an affordable luxury like handbags,” added Church.
Sales of intimates have accelerated over the past two years, according to Credit Suisse.
They gained more than 6 percent in 2014 and 2015, and are expected to increase 6.6 percent in 2016 and more than 7 percent in 2017, said a Credit Suisse forecast.
