WSJ: Handbag Prices Begin to Hit Their Limit

[TejasMama]

I posted this in the general handbag thread but also thought I would share it here because it cites Coach's recent increased price/status strategy and how they realized that they didn't have enough lower-priced options for the holiday season. It seems that even the wealthiest customers who can absorb all these brands' continued price increases are pushing back.

http://www.wsj.com/articles/the-sky-is-no-longer-the-limit-on-handbag-prices-1425503512

 

[theFlip#2]

Interesting article but why are some designers thinking ladies would want to spend $1.000 on a 'lunch bag' sized purse that only holds a cellphone, lipstick and a tic-tac, lol! For $1.000 I want a real-life handbag. So I'm going to choose a designer that offers more than their name.

 

[whateve]

Interesting article but why are some designers thinking ladies would want to spend $1.000 on a 'lunch bag' sized purse that only holds a cellphone, lipstick and a tic-tac, lol! For $1.000 I want a real-life handbag. So I'm going to choose a designer that offers more than their name.

I agree. Last summer, my favorite brand, Versace, was having a sale. The bags that were flying off the shelves was a tiny crossbody for only $800. I figured if I was going to spend that much on a bag, I'd rather spend the extra $200 - $500 and get a bag that would be more usable. In the end, I still couldn't bring myself to drop that much on just one bag.

 

[TejasMama]

Interesting article but why are some designers thinking ladies would want to spend $1.000 on a 'lunch bag' sized purse that only holds a cellphone, lipstick and a tic-tac, lol! For $1.000 I want a real-life handbag. So I'm going to choose a designer that offers more than their name.

Exactly.

And that has been my concern about Coach trying to change its brand image to a top tier with expensive designs that aren't in sync with the faithful Coach customer. I do like a couple of the new styles just fine, but a re-positioning of the brand into a market that is already getting pushback from customers who SEE THOSE BRANDS as a premier option, is going to be a tough sell. Coach is already stating that they made a mistake by not having more under $200 and under $300 options during the holidays. I've carried Coach for 20+ years but I don't believe this new strategy is going to work. It didn't work for Mulberry and I feel that Coach is using the same playbook, except the vast amount of their revenues come from outlet sales, so that is actually another strike against them trying to move into the premier market.

I think Coach had a unique brand history that they could have made more contemporary while staying true to its roots. I'm hoping they re-consider that in the future because the price hike money grab in the market, I feel, has now hit the wall. I will continue to root for Coach. It's a tough market. I hope they figure it out.

 

[cmars]

I'm sorry, am I missing something here? Why the heck would I shell out $1000 on a micro purse? I would expect a small price tag for a bag with "micro" in the name. I am a consumer who is tired of all the price hikes, so I stopped buying luxury brands. I like that coach bags are nice and I can pick them up at a decent price when the invites go out

 

[lovingmybags]

I'm sorry, am I missing something here? Why the heck would I shell out $1000 on a micro purse? I would expect a small price tag for a bag with "micro" in the name. I am a consumer who is tired of all the price hikes, so I stopped buying luxury brands. I like that coach bags are nice and I can pick them up at a decent price when the invites go out

Ditto, I wouldn't even pay $1K for a regular sized bag, no matter the brand. I don't see how producing smaller sized bags and/or from inferior quality materials should be considered a bargain. This is why sometimes I don't necessary purchase anything from outlets (not Coach, but stores in general), even if the prices are cheaper. The workmanship of these items occasionally don't even warrant the lower prices manufacturers are charging for them. I, for one, don't mind paying (up to a point, of course) more for something, if it's well-constructed.

 

[TejasMama]

Ditto, I wouldn't even pay $1K for a regular sized bag, no matter the brand. I don't see how producing smaller sized bags and/or from inferior quality materials should be considered a bargain. This is why sometimes I don't necessary purchase anything from outlets (not Coach, but stores in general), even if the prices are cheaper. The workmanship of these items occasionally don't even warrant the lower prices manufacturers are charging for them. I, for one, don't mind paying (up to a point, of course) more for something, if it's well-constructed.

I think much of this is relative. For example, the majority of women in general wouldn't consider spending money on even a Coach outlet bag--it's just not in their comfort zone--it seems frivolous to spend even $100 on a handbag. And then, for many of us, the premier pricing is outrageous.

I agree that it is well worth the money--to a point--to pay a higher price for value but, as bag prices increase, the value doesn't increase in the same proportions. What is interesting about this article is 1)Coach is a brand now trying to push into a higher tier of buyer with their increased pricing and elimination of PCE and 2) the people who aren't supposed to be price sensitive are now pushing back. If the high end buyers are pushing back, that's a big deal because that is the market Coach is trying to work its way toward.

 

[lovingmybags]

I think much of this is relative. For example, the majority of women in general wouldn't consider spending money on even a Coach outlet bag--it's just not in their comfort zone--it seems frivolous to spend even $100 on a handbag. And then, for many of us, the premier pricing is outrageous.

I agree that it is well worth the money--to a point--to pay a higher price for value but, as bag prices increase, the value doesn't increase in the same proportions. What is interesting about this article is 1)Coach is a brand now trying to push into a higher tier of buyer with their increased pricing and elimination of PCE and 2) the people who aren't supposed to be price sensitive are now pushing back. If the high end buyers are pushing back, that's a big deal because that is the market Coach is trying to work its way toward.

I wonder if I'm in Coach's market for now...just visited an outlet for the first time Saturday, since one opened within driving distance; have to say, with that experience I realized I'm a solid FP shopper. Of course, I admire how the ladies here can find such deals, but for me I am too OCD to deal with bags that're anything less than new condition. I imagine there must be some around that're perfect, yet flipping through shelves and try to find one like that just wasn't for me.

Personally, my price range is $800 and less-if Coach is trying to move to the $1K range, then it'll probably discourage me from buying; the reason I won't go beyond is exactly as you say, that after a few hundred dollars, the quality of the items don't necessarily increase. I just think it's deceptive that designers are trying to pass smaller/potentially inferior products off as bargain/entry pieces to their brand...

 

[melissatrv]

From the article


We will be adding products in the under $300 and under $200 range,” said Victor Luis, Coach’s chief executive, in an interview.

I am afraid the bags under $300 and $200 will be mini-bags or cheaply made tote bags. If Coach went back to pricing their medium satchels like Ryder and Swagger at $358 I would be happy. That price point is reasonable for me personally. Higher than that, I don't want to pay without PCE

 

[whateve]

From the article


We will be adding products in the under $300 and under $200 range,” said Victor Luis, Coach’s chief executive, in an interview.

I am afraid the bags under $300 and $200 will be mini-bags or cheaply made tote bags. If Coach went back to pricing their medium satchels like Ryder and Swagger at $358 I would be happy. That price point is reasonable for me personally. Higher than that, I don't want to pay without PCE

I think this might be one of the reasons the Legacy duffle was so successful. The prices were attractive enough, especially with PCE, that you could buy several. That, and the fact that it was a simple style that stayed true to Coach's roots, and the yummy colors.

 

[CoachMaven]

I think this might be one of the reasons the Legacy duffle was so successful. The prices were attractive enough, especially with PCE, that you could buy several. That, and the fact that it was a simple style that stayed true to Coach's roots, and the yummy colors.

Agreed! That collection was a home run, and should seriously be considered as a remake in the very near future. It was so classic Coach, with gorgeous colors, smooth leather, and so many options! I loved it when it debuted in 2012, and I still love it. I only wish I had gotten more than the Duffle and the Archival Rambler from the collection.

 

[GA Peach]

Agreed! That collection was a home run, and should seriously be considered as a remake in the very near future. It was so classic Coach, with gorgeous colors, smooth leather, and so many options! I loved it when it debuted in 2012, and I still love it. I only wish I had gotten more than the Duffle and the Archival Rambler from the collection.

+1! I agree and purchased....and continue to purchase from eBay and Tradesy.....more than my fair share!

 

[whateve]

Agreed! That collection was a home run, and should seriously be considered as a remake in the very near future. It was so classic Coach, with gorgeous colors, smooth leather, and so many options! I loved it when it debuted in 2012, and I still love it. I only wish I had gotten more than the Duffle and the Archival Rambler from the collection.

I have 5 duffles, 1 archival Rambler, 1 Courtenay, 2 Candaces, 1 bucket bag and 1 Romy. Wow, more than I realized!

+1! I agree and purchased....and continue to purchase from eBay and Tradesy.....more than my fair share!

Me too! I just got duffle #5!

 

[katierose]

Agreed! That collection was a home run, and should seriously be considered as a remake in the very near future. It was so classic Coach, with gorgeous colors, smooth leather, and so many options! I loved it when it debuted in 2012, and I still love it. I only wish I had gotten more than the Duffle and the Archival Rambler from the collection.

I agree they should do the Legacy line again, but this time they need to use the vat dyed leather, so the corners don't show wear so soon, and the bags don't scratch as easily. That may jack the price up a little, but well worth it.

 

[TejasMama]

The Legacy bags were some of my most favorite Coach has ever introduced. To me, it was that more modern twist on their popular vintage styles. And they sold like crazy. The duffles in all the updated colors? Loved them. The archival bags? Loved them. But...

I don't expect Vevers to revisit the legacy styles because he has his own vision of the future for the brand. I just find it interesting that they are already admitting that they need to introduce more bags in the lower price range. They are hitting price resistance--buyers have finally hit the limit in both contemporary and premier brands. I would hope the quality wouldn't suffer on the less expensive styles, and maybe under Vever's direction it won't, but we will have to wait and see.

I suppose this topic fascinates me because I have long been offended by companies that continually raise their prices as if a higher price tag is synonymous with quality and exclusivity. And so many people buy into that mentality. Yes, making them more expensive might mean fewer people buy them but I don't believe it has much to do with them being superior to other brands. I would put some of my older Coach bags up against almost any other brand in terms of quality and construction.