Anybody who follows the fashion business will tell you that, these days, the real money is not in the clothes; it is in the accessories. Take the house of Versace. It floundered after the murder of its founder. But it is now back in the black, thanks largely to the success of its handbags, a product that the house was rarely associated with when Gianni was alive. Or take Louis Vuitton. In theory, it’s just one part of the massive LVMH conglomerate but it accounts for the majority of the group’s profits (quite an achievement because LVMH includes Givenchy, Christian Dior, Celine, DKNY, Kenzo as well as Moët et Chandon and Krug Champagne). And Louis Vuitton is all about handbags. It makes some clothes but I doubt if anyone buys them. At the Gucci Group, the jewel in the crown is not the eponymous label (which is a bag company, in essence) but Bottega Veneta whose high quality handbags generate huge profits. A few labels do thrive without accessories (Armani, for instance) but even Chanel has predicated its overseas expansion on make-up and bags.
It’s not difficult to see why the bag market is so attractive to fashion houses. There’s no problem with sizing. They don’t have to decide how much of each product to make in which size—when it comes to handbags, one size fits all. The margins are spectacularly high. At Louis Vuitton, a bag sells in the shops for something like 14 times its manufacturing cost. With lesser labels, prices tend to be 12 times cost.
Diamond necklace or designer bag? (Illustration by: Jayachandran / Mint)
Then, there’s the international aspect. In the not too distant future, the principal markets for fashion labels will be in Asia (West Asia, Japan, China, the Asian Tiger economies and, eventually, India). Western fashion appeals to White people: to European and American sensibilities. Asians rarely like the clothes and nor do they look good in them. A Japanese woman in Ralph Lauren looks like a shop assistant; an Indian woman in Roberto Cavalli looks like an upmarket call girl and an Arab woman in Valentino looks like…well, she looks like an Arab in Valentino.
Bags get around that problem. Carry a Chanel 2.55 on the streets of Bangkok, Mumbai or Bahrain and the message will be clear: You are rich and have taste. Show off your Hermes Birkin in Shanghai, Singapore or Sharjah and it will always look right. Bags are the ultimate international fashion product. You can sell them anywhere.
But if the accessories boom makes sense for fashion companies, why does it make sense for the consumer? There was a time when even the rich carried expensive but discreet bags. The famous label handbags were few and their cost was related to quality. It takes a craftsman 17 hours to make a Kelly or a Birkin by hand. In the old days, every craftsman who made a Gucci bag had to slip a card with his number into one of the packets. If there was something wrong with the bag, Gucci would send it back to the man who had made it.
Now, Gucci bags are designed on computer and mass-produced (and even when the company was family-run, the decline had begun with the introduction of cheap canvas merchandise). The luxury bags (Hermes mainly) are still made the traditional way and cost as much as a car. But there’s a new range of very, very expensive handbags that are essentially industrial products. Even these bags go for upwards of a lakh. And such is the demand that it is the Rs2 lakh and Rs3 lakh bags that have the longest waiting lists.
Plus, there is the phenomenon of the It bag. Each season, fashion editors breathlessly announce what the new “must-have” bags are. Not to possess these bags means you are hopelessly out of date. Worse still, to carry last year’s It bag is a fashion faux pas. Even if you spent a fortune on the Mombasa or the Dior Saddle because the fashion editors told you to, they now moulder on your arm like decaying corpses.
I’ve always tried to work out why women will spend so much on a bag when they could buy a piece of jewellery with the money instead. At the lower end of the fashion pyramid, it is easy to explain: People like the thrill of carrying an instantly recognizable designer product such as a Louis Vuitton monogrammed bag. But why do rich women, who have nothing to prove, splash out, year after year, for one of Marc Jacob’s limited edition Louis Vuitton bags?
I have some theories. To wear a designer garment, you need a certain kind of figure. No matter how much money you spend on a Prada outfit, nothing will help if you have a fat ass or if rolls of lard line your navel. With a bag, there’s no problem. You can be old, fat, ugly, short, misshapen or whatever but the bag will stand out on its own.
The corollary to this theory is that almost everybody who can afford designer clothes in India is too fat or big-hipped to carry them off. Go to the Louis Vuitton store in Delhi’s Oberoi hotel and watch the fat Punjabi ladies peel off notes from wads of cash. Can you really see them wearing high fashion? Or go to the elegant Chanel store at The Imperial. How many Indian women could wear those clothes? Is it any wonder that they all buy bags and glasses?
The second theory has to do with gifting. Assume you want to spend a little money on a friend or a lover. What can you buy her? Clothes require fittings as do shoes: You buy them blind, at your peril. Jewellery is intimate; it makes a statement. Far easier, therefore, to buy an expensive handbag. If it’s from a trendy label and one of the season’s It bags, then it is a safe choice and it’s hard to go wrong. Show me a vaguely fashionable woman who says she does not appreciate the gift of an expensive bag and I’ll show you a liar.
It is these two factors, I suspect, that keep the fashion companies in business. From 2001 to 2004, the luxury goods market increased by 1.2% per year. But sales of leather goods increased by 7.5% each year in the same period.
Since then, the trend has gathered more steam. The big labels may make clothes but the profits will come from bags—as long as there are enough rich old bags around to buy them!
Write to Vir at firstname.lastname@example.org