Building a Better Bag: H Hilfiger Latest in Booming Sector

The launch of H Hilfiger handbags adds another player to retailers’ increasingly desirable better-price arena.

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NEW YORK — Retail’s better bonanza is starting to spill over into handbags.

Fueled by the success of Coach, which prides itself on offering accessible luxury and which reported a staggering 119.9 percent fourth-quarter boost in income last week, the better bag business is blossoming and 2005 looks set to become the year it reaches full flower.

Tommy Hilfiger is the latest player vying for a piece of the better bag action with his new H Hilfiger line for spring. Lauren by Ralph Lauren already has a better-priced handbag line that’s licensed to Wathne. This fall, Michael Kors’ Michael Michael Kors handbags and Etienne Aigner’s higher-priced Etienne label are being launched on department store main floors nationwide. Calvin Klein International said last week that it also is planning to launch accessories for its better-priced Calvin Klein line in a license with Accessory Network Group for spring.

The tier’s development is likely to shift the dynamics on the main floor. It could potentially steer the focus from moderate resources to high-profile, aspirational American designers, which is perhaps a reason many expect exponential growth in the sector this year and beyond. Lew Frankfort, Coach’s chairman and chief executive, said last week that the company’s internal analysis projects “at least 20 to 25 percent growth in sales of premium handbags and women’s accessories” this year.

“If you look at the parallel in the apparel market, you have a lot of strong players in the better tier, so you would think there was some room in accessories as well,” said Lori Wachs, a vice president at asset management firm Delaware Investments. “For years, we didn’t see any new players in the better market, and now Calvin Klein, Michael and H Hilfiger are coming in. You will have all these new entries which can create excitement and bring people back into the department stores.”

Last week, Hilfiger presented the first complete collection of H Hilfiger handbags at the company’s West 39th Street headquarters. The bags are expected to roll out to Federated Department Stores next spring, and Hilfiger hopes they will establish him as a force to be reckoned with in the lucrative handbag business.
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