Oct 10, 2007

Years of record growth for handbag sales could be overBy Cotten TimberlakeIHT.com

New York: The $7 billion market in the United States for handbags, the fastest-growing product in the fashion industry, might be slowing from the record growth seen in recent years.

Some analysts and retailers say that the increases in U.S. handbag sales may have peaked, as competition from other accessories like shoes and jewelry heats up and as higher gasoline and mortgage costs slows consumer spending.

The sales increases that reached as high as 28 percent in 2004, the strongest annual pace on record, could fall back to as little as 15 percent this year, with no signs of recovering before 2009, according to the Telsey Advisory Group, a stock research firm in New York.

The firm was founded by Dana Telsey, a retail industry analyst who was ranked the top speciality stores analyst by Institutional Investor magazine every year in the seven years to 2005.

Stephen Sadove, chief executive of Saks, said the handbag’s status as a must-have item is being challenged.

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