Report: Rising Number Of Working Women Fuels Growth In Designer Handbags.
Byline: Tanzeel Akhtar
The luxury market is forecast to grow rapidly despite the U.S. trade representative's recent announcement of a list of $7.5 billion in tariffs on European products that take effect Friday.
Earlier this month, UBS analyst Zuzanna Pusz said the tariffs could lead to increased overseas spending by U.S. consumers and reduce foreign tourist spending locally.
One determining factor will be if leather goods, suits and premium spirits are included, as this would impact most companies in the UBS coverage universe, the analyst said.
Designer Handbags In The Lead
The global luxury handbag market, estimated at a size of $49.2 billion, will gain at a compound annual growth rate of over 7% to reach a market value of over $61.3 billion by 2026, according to WiseGuy Reports.
What is behind the handbag boost?
One factor driving the growth is the rise in the population of working women globally, the report said.
Females make up at least 40% of the workforce in more than 80 countries, according to a Pew Research Center analysis of labor force statistics.
Across all of these countries, the median female share of the workforce is 45.4%. The countries include the U.S., Canada, U.K. and France.
The introduction of convertible or multipurpose handbags is expected to boost the market, with luxury handbags including totes, backpacks and satchels leading the way.
In 2018, the leather segment led the luxury handbag market and is expected to retain its dominance, according to WiseGuyReports.
Europe holds the largest market share for luxury handbags due to rise in the supermarket and hypermarket culture and a rise in the number of working women, the report said.
Investment and development in Eastern Europe is growing. A retail boom is occurring in Russia, with 63 new complexes in 40 Russian cities.
The major players in luxury handbags are PVH Corp (NYSE:PVH), LVMH Moet Hennessy Louis Vuitton SA (OTC: LVMUY), COMPAGNIE FINAN/ADR (OTC: CFRUY), Furla S.p.A. and Giorgio Armani S.p.A.
Other key players in the market include Capri Holdings Ltd (NYSE:CPRI), formerly Michael Kors Holdings, HERMES INTL SCA/ADR (OTC: HESAY), KERING S A/ADR (OTC: PPRUY),PRADA S P A/ADR(OTC: PRDSY) and Tapestry Inc (NYSE:TPR).
Earlier this month, luxury fashion stocks soared after LVMH the parent company of Louis Vuitton and MoE1/2t revealed its third-quarter sales were better than expected. LVMH reported a 19% rise in organic revenue from fashion and leather goods.
The luxury goods titan's overall revenue jumped 17%, contributing to a 16% rise for the first nine months of 2019.
Investors had also feared that the mass protests in Hong Kong would weigh on sales of luxury fashion brands. LVMH's positive performance suggests the unrest hasn't changed buying habits in Asia.
Analyst: U.S. Tariffs On European Goods Will Impact Luxury Market
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|Date:||Oct 18, 2019|
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