Pursuits
Handbag Industry Tightens Purse Strings to Cope With Slow Sales
- Kate Spade, Kors and Coach top anaysts' earnings estimates
- Companies cut costs, discounts as shoppers favor smaller bags
A Michael Kors Holdings Ltd. store in New York City.
Photographer: Victor J. Blue/BloombergThis article is for subscribers only.
Michael Kors Holdings Ltd., Kate Spade & Co. and Coach Inc. all topped analysts’ earnings estimates for the past quarter after the handbag retailers cut costs and reduced discounts to cope with sluggish sales.
Growth of the once-hot segment in North America has slowed to low single digits, Kors Chief Executive Officer John Idol said Wednesday on an earnings conference call. Young customers are still buying handbags and leather goods, but styles have shifted to lower-priced large wallets and small cross-body bags. To protect their brands and margins, companies are reducing discounts, adding new products and slashing costs.