By RUTH LA FERLA
How did this happen?" Nina Collins asked as she settled down to a lunch of miso soup and salad in downtown Manhattan last week. "When did we get to this place where we spend $1,000 on a bag?"
The question was rhetorical. Not long ago Ms. Collins herself arrived at that place, succumbing, she confided a bit sheepishly, to a yen for a handbag styled like a saddle bag from Mulberry, a British luxury brand in high demand at stores like Barneys New York and Bergdorf Goodman. The price, about $1,200, struck her as an affront to reason. But she had to have it.
In buying the handbag Ms. Collins, a literary agent, joined an ever widening circle of status-driven, selectively acquisitive consumers whose purchasing habits have buoyed the luxury market this year - steeper gas prices, inflation and a weakened dollar be damned. A sense of optimism, which industry executives and analysts say is being fueled by a strong stock market and a desire to trade up without regard to price hikes of 20 to 35 percent over a year ago, has propelled shoppers to stores in ever greater numbers.
In their pursuit of the season's most coveted bags, many are giving common sense the slip, parting with, say, $975 for a best seller like the Marc Jacobs Sofia bag, which which last fall commanded $895, or $1,445 for a leather Prada "bowler" bag that, a few seasons back, cost $940 or $990 for similar models. Shoppers' infatuation with handbags has lent that category significant clout, to the point, retailers and industry analysts say, that bags have supplanted shoes, jeans and even jewelry as consumers' choice signifier of affluence, social standing and hipness. Never mind that some models, in the battered and fringed styles now popular, look as though they belonged to a tramp.
"It seems that each year what we're seeing in the women's fashion luxury market there has been a migration from one category to the next," said Marshal Cohen, the chief retail analyst for the NPD Group, a market research firm in Port Washington, N.Y. "A few years ago it was shoes. Last year it was jeans. This is the year of the handbag."
Handbag sales, which were $5.34 billion in 2003, were projected to climb 8 percent for 2004, the latest figure available from Accessories Magazine, a trade monthly. Women who bought bags last year spent on average only $40 to $65, according to NPD. Ultra-luxury designer bags - from $650 to about $15,000, which account for an estimated 5 percent of the market - are important because the designs invariably filter down, setting the trends for the mass market.
One reason for the rise of these bags is that the rest of fashion has moved toward a more dressed-down look, so that even jeans may be appropriate for a dinner party. A four-figure bag imparts the corrective message: I am not a graduate student. "You can go out with blue jeans and cowboy boots, and that high-priced bag makes it all O.K.," said Cece Cord, a social figure in New York who sells her crocodile handbags at Bergdorf Goodman. "A bag is sort of like a portable house. It represents you."
Luxury analysts say the new handbag aficionados aren't necessarily middle-aged or rich, and that some may defer other purchases in order to splurge. "Bags are selling to women in a wider age range than we've ever seen before," said Dana Telsey, a retail analyst with Bear, Stearns, citing customers from their 20's to their 60's and 70's. The youngest are willing to make a tradeoff, Ms. Telsey said. "Maybe it's their lunches. Or maybe it's their living quarters. They'd rather wear their paycheck."
Pamela N. Danziger, the president of Unity Marketing, a consulting firm specializing in the luxury market, maintained that the majority of women buying luxury bags tend to be younger than 40 and to earn from $50,000 to $75,000 a year, or in rarer cases just over $100,000. "Those women are the most likely to be extravagant," said Ms. Danziger, the author of "Why People Buy Things They Don't Need" (Dearborn Trade, 2004). The tend to sacrifice vacations, restaurant dinners and other designer fashion in favor of a luxury bag. "They are the consumers who have something to prove," she said.
Even when they know better. "Do we really need another bag? No," said Gillian Miniter, who runs a small jewelry business from her home in New York and is married to an investment banker. Recently, Ms. Miniter, 37, splurged $3,500 for a crescent-shaped Hermès bag for reasons she is hard-pressed to explain. "It's almost like how you feel when you buy a piece of jewelry or something that just speaks to you, and when it speaks to you have to have it," she said.
The ubiquity of clutches, totes, oversized carryalls and weekend bags on designers' runways, on store shelves, in magazine ads, on the arms of celebrities and on city streets is propelling the trend. Open any fashion glossy this season, and there are pages upon pages of ads for bags, more than in recent seasons, enhancing the perception that a bag is the fashion accessory most worth having.
"Who is not doing a bag line these days?" asked Ed Burstell, the senior vice president and general merchandise manager of Bergdorf Goodman, citing designers like Zac Posen, Narciso Rodriguez and Alexander McQueen as all having recently joined the fray. "There are a lot more people in the game this year," Mr. Burstell noted, and that ratchets up the competition to turn out "a more intriguing product that commands a price, no matter what."
In department stores, handbag departments that a year ago occupied no more than a few counters of real estate, have muscled their way into full rooms, or in some cases, a significant part of the main floor selling space. Last year Bergdorf Goodman expanded its primary selling area for handbags from one to two large rooms. In 2002, as part of a main floor renovation, Barneys New York likewise substantially increased its space for bags.
Wayne Mahler, the fashion coordinator for the Linda Dresner boutiques in New York City and Birmingham, Mich., said that his customers are buying fine European-made bags that are up, despite price hikes attributed in large part, to the strength of the euro.
"For some women, finding the right bag is as important as oxygen," he said. Like other retailers interviewed, Mr. Mahler fielded hundreds of calls last season for the increasingly elusive Paddington bag, a pliant , hardware-embellished satchel made by Chloé ."It was cuckoo," he recalled. "We had people weeping on the phone, pleading: 'This is really important to me. Isn't there something you can do?' "
In contrast to some past years, there is no single "It" bag that seemingly everyone wants. Demand is more diffuse, encompassing a varied array of fall hits like an oversized black velvet reticule from Marc Jacobs ($2,900), a countrified fringed suede carryall from Hogan ($995), a subtly weatheredlooking Lanvin shoulder bag suspended from a chunky chain (about $1,200), and the Fendi Spy bag, a multi pocketed style available this fall in tulle ($4,830).
Paradoxically, even such studiously shabby materials as denim - which has found its way into one of the year's most sought after bags, the so-called Speedy from Louis Vuitton, ($1,280), a denim carryall emblazoned with the company's "LV" mongram - seem at times to elevate a bag's' worth in the eyes of luxury shoppers.
Never mind that a bag's most distinctive features - a profusion of pockets, padlocks and chains - are readily knocked off at every level of the market; that the soaring costs of materials and labor have forced many European designers to make their bags or bag components in China or Turkey.
Robust sales of expensive handbags are working their magic on the bottom lines of the world's leading luxury conglomerates. Both PPR, whose Gucci Group elevated a bag and shoe designer to its chief women's wear designer, and LVMH Moët Hennessey Louis Vuitton, whose cash cow is Louis Vuitton, with its famous monogramed handbags, reported strong surges in profits for the first half of the year. Ms. Telsey of Bear, Stearns attributed the demand for luxury goods to "a feel-good factor in the macro environment," that is, a robust stock market.
Carol Bell, 36, a Miami resident and divorced mother of two, is unfazed by the soaring cost of handbags. Ms. Bell, who earns about $150,000 a year as the co-president of a public relations firm, recently acquired a Mulberry tote and has her eye on a monogrammed Goyard canvas bag, a rarefied item that has yet to infiltrate such affluent Miami enclaves as Coral Gables or South Beach. "I'm not extremely wealthy," she said, "but when something is appealing to me I don't put a price on it. "
Ms. Bell, whose workday may stretch to 18 hours, makes up for the drudgery by buying a bag. "At the end of the day, when I leave my office, and throw my keys inside it, it gives me such a sense of reward, " she said. "I know the price of fuel is up, but if I'm trying to decide between a tank of gas or a great designer bag, I'm going to walk and carry that bag."
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