Handbags are coming back.
Wells Fargo analysts wrote in a note to clients that “sentiment appears to have suddenly (and meaningfully) shifted,” with shares for handbag companies like Coach, Michael Kors, and Kate Spade soaring.
Wells Fargo says this is because the companies reported strong fourth quarter results, and proved they’re still improving. Additionally, Wells Fargo points to the fact that “buying patterns are still healthy.”
The trend is a promising shift for these companies, which were previously thought to be in trouble.
Coach and Michael Kors, in particular, have been subject to ample criticism in the past few years, largely for being too ubiquitous. Michael Kors’ three-tiered brand — a high-end brand, a middle-market brand, and a discount-level brand — seemed as though it would undermine the retailer for a while. If a consumer could get a cheaper handbag, why pay full price?
Worse, retail expert Robin Lewis of The Robin Report has written about how outlet stores can damage a brand’s reputation and make it lose its luxurious lustre.
Coach, however, has been on the brink of a comeback, and earlier this year, Wells Fargo said that a turnaround for the brand was “imminent.” The retailer has been working to undo its damaged reputation by renovating stores and cutting back on promotions.
This handbag revival comes on the heels of the return of the luxury logo.
Popular fashion blog Man Repeller declared that logos were back this past summer, though they were largely considered to be “tacky” previously. Now, however, spending money on something expensive suggests a shift from buying inexpensive, disposable goods to saving up for quality, long-lasting products.
“Or do the recent nods to blatant branding further substantiate a case for slow fashion — quieting down the necessity we’ve cultivated to buy, buy, buy, cheap, cheap, cheap in order think more thoughtfully about what we want to say when we set out to script our sartorial screenplays?” Leandra Medine wrote on the website.
Though the logo revival could be spurring the handbag renaissance, there are still some setbacks the category might face.
Only this past fall, young people — those who generally prefer to refrain from purchasing luxury goods — demonstrated a distaste for handbags.
In a study executed by Goldman Sachs and Teen Vogue in the fall, fashion influencers age 13-29 didn’t seem to care too much for handbags, causing Goldman Sachs to claim that the category was “falling flat.” Rather, the young women that Goldman Sachs and Teen Vogue polled preferred to spend their money on athletic wear and cosmetics.
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