The End of the ‘It’ Bag Era

Celebrities proudly toting ‘It’ bags in the early Aughts.

The Saddle Bag. The Paddington. The Baguette. Iconic styles with indelible names that emerged from the ‘It’ bag era of the late Nineties and early Aughts. But in the decades since, e-commerce, social media, price transparency, the resale market and shifting status symbols have left the phenomenon in an irrevocably changed state.

The end of the ‘It’ bag tradition demonstrates how a new era of consumer culture has taken hold of the industry. The market is flooded with more choices and points of sale than ever, all aimed at an ever-discerning consumer base — making the bag market a highly competitive category with little wiggle room for dominant success.

In the ‘It’ bag’s heyday, one particular design would reign — a ‘look at me’ status symbol proudly hanging over the backs of chairs at trendy restaurants and prominently featured in celebrity tabloids. This is no longer the case, with the market now reflecting a broad price and style spectrum, and a consumer eager to find a unique design that suits her needs and individual taste. According to Barneys New York fashion director Marina Larroudé, the industry “is not like in fashion 15 years ago, when it was about the Fendi Baguette and you’d see it everywhere, the trends were very clear.”

The End of the ‘It’ Bag Era

Fendi’s Baguette Dream Room. 
courtesy image

Lisa Aiken, Moda Operandi’s women’s fashion director, said: “At its height, the industry was dominated by a few styles, it was very specific and went everywhere. Now I feel like styles have almost a cult attraction. It’s far more fragmented — consumers are more savvy about personal style and understanding what they like and don’t like rather than being led by a singular style.”

Social media has sparked that fragmentation. Rather than reach ‘It’ bag status, today’s styles reach their apex with a sort of seasonal cult following — with tribe members connecting and exchanging looks over Instagram. Many of the successful bags today hail from direct-to-consumer, independent labels.

At present, the downtown set gravitates toward Telfar’s mini tote bags ($140), girly-girls have Susan Alexandra’s beaded carry-alls ($280), fashion plates look to Staud’s Shirley style ($250) and classicists gravitate toward Wandler’s Luna shoulder bag ($800). Those headed on a tropical vacation might look to Mercedes Salazar’s woven palm frond bags, ($440) and Cult Gaia’s acrylic Ark bag ($280). Handbag elitists entrenched in the luxury price range like Gabriela Hearst’s inventive designs (about $2,000), while others have begun warming to Hedi Slimane’s ‘16’ style for Celine (from $4,150) particularly in the Asia-Pacific region, where a carefully selected group of K-Pop stars and soap opera actresses have been chosen to promote the designs on social media.

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In the ‘It’ bag’s heyday, designer status-driven consumption was a relatively new phenomenon on a commercial level. In the last 20 years, though, this practice has since “become part of our buying culture,” said fashion consultant Julie Gilhart. “Everyone on the runway has a bag, it was a status symbol, but today our status symbols have changed.” Shoes, for instance, have become more of a status calling card.

A new class of midprice bags — priced under $1,000 and offering fashion-forward looks — also has emerged in the last three years. Brands like Staud, Wandler and By Far have begun to be bought by department stores — generating excitement among the same consumers who are accustomed to buying designer, further fragmenting the market.

While there has long been a contemporary price point in department stores, these products generally did not offer enough of a fashion quotient to compete with the looks served by big designer brands. But retail consultant Robert Burke summarized the strengths of the new midprice category of brands, noting: “These bags are very distinctive, very Instagrammable, and for many of the consumers satisfy a need for an updated fashion bag.”

At Barneys, Larroudé has noticed that, “The consumer is much more willing to buy a bag for $300 from a brand they have never heard of before. This is a change in consumer behavior. Before it was, ‘No, I just want to buy very high-end designer brands.’ Now they are more willing to try out a new brand. The customer can buy two or three in a season.”

The Internet has played a major role in these labels’ ascent — enabling many of them to begin with direct-to-consumer models in order to keep pricing low. They rely on organic marketing, authenticity and a direct channel of communication with consumers in order to set themselves apart from the traditional fashion pack. The category has drummed up excitement, creating micro-communities of fans on the Internet, with young consumers racing to be the first in their group to purchase and post a new design or label.

The End of the ‘It’ Bag Era

Staud’s Marabou bag, priced at $325, retail. 
Courtesy

“What people like about our brand is its sense of discovery — they wear the badge that they are partaking in this sort of newness — that is something that’s definitely encouraged by social media,” said Sarah Staudinger, cofounder of the Staud brand, which attributes 60 percent of sales to the handbag category.

Susan Alexandra founder and designer Susan Korn noted that, “There is a cult of the bag. There is this individuality that is really apparent with social media. If you wear a big-name brand, you can get it at any number of department stores. There is now this element that everyone wants to be the first to discover something and put it on Instagram.”

Aiken feels that these labels’ technological agility has enabled them to get ahead. “Brands are having a direct relationship with the consumer in a way that didn’t exist before without being filtered through an editor or buyer and that means that we are seeing a bag market that’s far more democratic and open,” she said. “It becomes about good design rather than buying a label. The bags that are most interesting have very little branding, it’s very much about a point of view.”

Korn’s engagement on social media is intrinsic to her success. She has a constant eye peeled toward Instagram, where she reposts and interacts with her consumers on an hourly basis. “There is not a personal connection with big brands. With my brand, people know the person behind it. I think how the world is now, we are all into transparency and coming out from behind the curtain.”

She labeled her interactions with consumers as “thought-provoking, sometimes even offensive. But I definitely have direct communication and that is very, very valuable. At the same time, when they are making requests, I have to decide for them. I am still the one behind the brand.”

But while the midprice category is quickly on the rise, Aiken said, “I don’t think it has taken away market share [from the luxury market]. I think designer handbags are still a very healthy space, I think if we are talking in growth — it’s a far more stable business than the midrange. That category’s growth is very accelerated on a brand level but it’s a more volatile market.”

The End of the ‘It’ Bag Era

A Dior Saddle bag designed by Maria Grazia Chiuri. The brand reissued the style after resale prices of the Galliano originals began surging. 
Courtesy Image

Case in point: The midprice category has fast become so crowded that it’s already seen one notable casualty. Last month, WWD reported that Chris Burch-funded label Trademark, designed by two of his daughters, was ceasing operations. Forced to lower its prices to compete in the market, Trademark’s margins were, according to sources, untenable for the long haul.

Larroudé also cautioned that, while the midprice is making a lot of noise in the industry, “When you look at the numbers, it’s not the conversation you are having with your friends about an Instagram brand. Big numbers from a store like us show that the big brands with big marketing dollars are still extremely successful. Bags have multimillion-dollar businesses behind them. If people want to invest in a designer bag they are going to go back to the big brands.”

She said that midprice labels do have potential to scale, but it’s nearly impossible to compete with the likes of a Givenchy or Chloé given fashion’s big-business structure. “I do think they can get their own market share and can be extremely successful, but to be a multimillion-dollar business takes a lot of branding, it takes different types of product. It’s a bigger machine in a way.”

At present, the luxury bag market is facing its own fleet of conundrums. There are concerns over a potentially slowing market in China (though LVMH Moët Hennessy Louis Vuitton claimed otherwise when reporting fourth-quarter earnings last week), the rise of the resale market and the increasing popularity of the shoe category.

The resale market has changed the way many consumers engage with high-ticket bags — with some researching their resale value before purchasing, ensuring a return on investment. According to Gilhart: “Now we live in a day when you can rent, you can actually resell a bag and buy another bag, and resell it again very easily. You have more options now in terms of buying something that’s expensive as an investment.”

Burke added, “I think the customer has approached luxury items in a much more discriminating way in how they spend. They really study it. I don’t find the impulse as high as it used to be because it felt like you had to buy it now. Now people know many ways to get a bag, they can think about it and research and the emotion and immediacy has been a little bit taken away.”

In some ways the shoe market has taken the place of the ‘It’ bag — with hit sneakers, boots and sandals becoming must-have items. Burke feels that shoes offer a much better value equation: “The customer is realizing they can get a lot of bang for $600 on shoes — then you start thinking about $3,000 or $4,000 for a bag. The customer is very selective and very thoughtful in how they spend money today, no matter how much they have.”

He added that, “Shoes still have an impulsive nature about them. There is something about shoes that gets the consumer really excited.”

If there is one thing that seems to be working today, it appears to be nostalgia. Luxury brands have now made a business of reissuing their famous bags from the ‘It’ bag era, conjuring a certain nostalgia and joy that has helped incite consumer response. In 2015, WWD was first to report that Millennials were eagerly buying up vintage Dior Saddle bags on the thrift market. In the years since, the house has reissued the style — quickly becoming Instagram catnip, and arguably higher viral visibility than any of the house’s newer bag designs.

This New York Fashion Week, Fendi will step into the ring — holding a party on Thursday night to celebrate the reissue of its Baguette style.

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