Luxury brands face the decline of the it-bag

Within two years, purchases of luxury handbags are projected to decrease by 13.69 percent. This figure, revealed by a recent study from The Independents, highlights a radical shift: while this chic accessory was previously attributed with the power to confer a certain status, this status is no longer solely represented by an object or a price, but by knowledge. Are we moving towards less materialistic values? Not entirely.

In recent years, the press has repeatedly pointed to significant price increases for designer handbags. Between 2019 and 2024, the price of Prada’s Galleria Saffiano bag increased by 111 percent, Louis Vuitton’s Speedy 30 by 100 percent, Gucci’s GG Marmont by 75 percent, and Chanel’s 2.55 (large version) by 91 percent (source BoF).

These colossal increases have, in part, generated the saturation now felt by consumers towards luxury handbags. But they are not the only culprits. The profusion of models flooding the market creates a feeling of being overwhelmed by too much choice – not to mention the proliferation of dupes, which leads to brand dilution (a legal concept that protects the distinctive quality and reputation of a brand). Overabundance and exorbitant prices are pushing consumers to prioritise the purchase of culturally enriching experiences (or artefacts) over luxury handbags. This is what the experts at The Independents predict in their report titled Luxury’s Great Reset, published at the end of 2024.

“Interest in designer clothing and handbags is expected to decline by 2027, in favour of art, watches and jewellery, as well as the bespoke experiences found in the hospitality sector,” states the study conducted by the creative agency.

And this disinterest is already being felt. In terms of figures, leather goods sales for several major luxury names are struggling. In the third quarter of 2024, the Fashion & Leather Goods category of the giant LVMH saw a decline in sales: 9.2 billion euros, compared to 10.3 billion euros in the second quarter of 2024 and 10.5 billion euros in the first. Its competitor Kering also announced in its 2024 half-year report that the Shoes and Leather Goods categories of its secondary houses (Alexander McQueen, Balenciaga, etc.) have “suffered from the moderation in demand from customers with more limited purchasing power in certain markets.” These categories represent 17 percent of the revenue reported by this group of brands, compared to 18 percent in the 2023 half-year report and 20 percent in the 2022 report. It should be noted, however, that these declines generally accompany an overall decline in a brand’s results. The Independents are not only predicting the decline of luxury handbags but also that of luxury clothing.

In November 2024, Altagamma, a foundation for the promotion of Italian excellence, also noted a slowdown in the Leather Goods category (as well as in Watches and Shoes). According to the foundation, consumers are becoming increasingly selective in their purchases.

Solutions: Between price reductions and new product launches

For now, however, designer bags maintain their desirability through five-star campaigns, collaborations with celebrities and influencers, and the revaluation of past versions enabled by the explosion of the second-hand and vintage market. In any case, to address declining revenues, groups cannot ignore a category that has long been a major driver of their growth. In 2024, LVMH announced the release of numerous new leather goods. The same is true for Saint Laurent and Gucci. But the creation of new handbag models is, of course, not the only solution.

In a move that brings them (slightly) closer to contemporary brands, whose more accessible handbag lines (under 1,000 dollars/800 pounds) are enjoying considerable success, several luxury houses have decided to lower their prices.

This is the case for Saint Laurent, a Kering Group brand, as well as the British brand Mulberry. The latter revealed to Bloomberg in November 2024 that it intends to reduce the price of its handbags to under 1,100 pounds to stimulate sales.

Louis Vuitton has employed the same price adjustment strategy, although this has been done in both directions. According to the Yonhap news agency, LVMH’s flagship brand has increased the prices of some of its items and decreased those of others in South Korea. For example, the Capucines MM handbag saw its price drop from 10.55 million won to 10.1 million (6,200 pounds), and the Capucines Mini, which cost 8.78 million, is now worth 8.39 million (5,150 pounds). The news agency points out that this slight decrease follows a 7 to 8 percent increase in June 2023.

However, these reductions could affect the brand’s image and the value of its products. This choice is therefore far from being shared by the entire industry. Especially since consumers are not shunning handbags from all luxury brands.

‘Mega-artisanal’

The French house Hermès, one of the only luxury brands to maintain solid growth, continues to benefit from the success of several of its iconic models, including the Birkin bag. Initially sold for around 2,000 dollars (1,570 pounds), its price has increased over the years, generally with a 4 to 5 percent rise, according to Sotheby’s. But in recent years, the auction house has noticed a more significant increase in the prices of certain iconic bags from the brand: nearly 8 percent in the US in 2024 and 9 percent in Europe in 2023. At Hermès, these increases do not deter buyers; quite the contrary.

In the context of a decline in luxury handbags, Hermès stands out as an exception. This success can be explained by a commitment to timeless craftsmanship and the resulting exclusivity. The continued price increases make the product attractive on the second-hand market, as it contributes to making it a safe investment (the pre-owned Birkin 30 in Togo leather sells for 2.2 to 2.4 times more than the primary market price, according to the aforementioned study).

For The Independents, by making its products historical pieces and safe investments, Hermès has positioned itself at the intersection of artistic heritage and financial prudence. It no longer offers luxury accessories, but collector’s items capable of attracting a client who has recently transitioned from the status of consumer to that of investor, or even collector (according to The Independents, art and photography are expected to experience 9.48 percent growth between 2024 and 2027).

Bottega Veneta, a Kering Group brand, is also an exception. In the third quarter of 2024, the group noted in its report that the brand’s performance continued “to be driven by the remarkable success of its leather goods offering.” In 2024, this represented 79 percent of its turnover.

Like Hermès, the Italian house’s bags owe their success in particular to the promotion of craftsmanship. In 2023, Bottega Veneta released the film “Craft in Motion,” which explores the past and present of the house by showcasing its craftsmanship and creativity. Under the direction of its former creative director Matthieu Blazy (now at Chanel), the brand has brought its iconic Intrecciato leather back into the spotlight and taken craftsmanship to new heights. “When we sat down with the team, I said: ‘Let’s do something mega-artisanal that’s also extremely real,’” the designer told Vogue magazine.

In the hyper-competitive landscape of luxury leather goods, only brands with remarkable craftsmanship, and who know how to promote it, are thriving. For others, exploring the experience economy is a winning bet.

The experience economy

The Independents’ study shows that consumer demand for experiences remains insatiable. Experts indicate that, on average, “the desire to spend on holidays and hotels has seen a projected increase of 14.19 percent over eight years, while ‘gastronomy’ has seen an 11.81 percent growth during the same period.” These results correspond to a powerful and general market enthusiasm for culturally enriching activities and shared experiences.

“Customers are tiring of products and are increasingly interested in more exclusive categories such as fine arts, or experiences such as travel or gastronomy,” notes Elisabetta Tangorra, chief brand officer of Karla Otto and a contributor to the study. “Of course, we all want to continue to participate in the fashion game, but only when the products have real meaning.”

Thus, after its massive investment in the Paris Olympic Games, the LVMH group made a strategic acquisition in prestige real estate on the French Riviera at the end of 2024 (a historic 12-bedroom villa in Cannes for 46.5 million euros, according to Bloomberg) and took a minority stake in Les Domaines de Fontenille (luxury hotels).

But the best approach is to combine cultural experience with handbags and other luxury items. This is the aim of Gucci, which has been losing momentum in recent years and whose leather goods represented 50 percent of its turnover in 2024. In January 2025, the brand unveiled a new immersive window concept incorporating its archives, called Endless Narratives, which it presents as “a journey into the heart of a cultural kaleidoscope, where books, artefacts and treasures converge through time, from the past to the present and towards the future.”

Another Gucci project contributing to (re)establishing its link with culture: the Gucci Prospettive books, in which creative director Sabato De Sarno “continues the dialogue between art and fashion.” The third volume, published in September 2024, “highlights the historical contribution of women in Italian art and culture, emphasising practices that resonate with those that inspire the Gucci spring/summer 2025 collection, such as Dadamaino’s surfaces, Carla Accardi’s colour repetitions, and Matilde Cassani’s two-dimensional interventions.” The Prospettive books, sold for 50 euros (43 pounds), are there to enhance the house’s creations but also to create a cultural link with the consumer by providing knowledge and keys to understanding its collection.

As The Independents explains in its study: “Luxury consumption is increasingly driven by culture, where luxury is not just a sign of status but also an entry point into a meaningful community.” Exhibitions dedicated to and financed by luxury giants are expected to play an even greater role and multiply within museums around the world or directly in stores, as was the case with Gucci and the project entitled “Bamboo 1947: Then and Now,” an exhibition held in the flagship store in Tokyo and dedicated to its Bamboo 1947 bag.

The current landscape of luxury handbags

For several years now, major luxury brands have ultimately offered relatively few completely new handbag designs (apart from exceptional moments like Bottega Veneta under the direction of Blazy). Teams are focusing instead on iconic models that have proven their commercial worth. They revisit them through collaborations or by tweaking their details, proportions, materials, or patterns, reinforcing the aura of models whose history ensures their value through slick campaigns. Examples include Fendi’s Baguette bag, the Lady Dior, Paco Rabanne’s 1969, Gucci’s Jackie, or Chanel’s 2.55.

Nevertheless, new models are regularly added to brands’ repertoires. Among them are Alaïa’s Teckel bag, created for the AW24 collection (2,100 euros/1,800 pounds for the medium version), Bottega Veneta’s Sardine bag, presented during the AW22 show (3,700 euros/3,200 pounds), Dior’s D-Journey, unveiled during the SS25 ready-to-wear show (3,900 euros/3,350 pounds for the medium version), Loewe’s Squeeze, from the AW23 show (4,000 euros/3,450 pounds for the medium version), or Givenchy’s Voyou bag, presented during the SS23 show (2,050 euros/1,760 pounds for the medium version). Each time, the press plays out the same scenario: the piece is seen on the arm of celebrities and announced as THE new It-bag.

However, one can question the very notion of the It-bag. Does it still have meaning when it is repeated endlessly to qualify every handbag launch? Buyers are no longer fooled, and the influence of the “new It-bag” in vogue no longer has the same power as before, as the multiplication of trends has become tiresome to the ears of a consumer now inclined to invest, or even “place,” their money in safe bets. Moreover, simplified access to houses’ archives via resale platforms like Vestiaire Collective and Vinted has largely contributed to questioning the need to buy new, since vintage pieces have now acquired great value.

It is now the thrill of a vintage bag, a “gem” from, for example, the 1950s, unearthed at a flea market, a platform, or snagged at an auction, that excites the buyer. Because this bag belongs to history, because it is rare, and because wearing it also means displaying one’s expert knowledge of fashion culture.

This article originally appeared on FashionUnited.FR. It was translated to English using AI and edited by Rachel Douglass..