Handbags fuel sales growth at Kurt Geiger.
Kurt Geiger has successfully transformed its business from a pure footwear brand into a broader operation with handbags and accessories now representing more than 50% of its revenues in the UK.
The company recently reported a record-breaking month in December when sales jumped 15% on the previous year to reach £45 million – with store sales up by 12% and online an impressive 45%. This growth has come from both the UK and the US, which has become the company’s largest market following revenues increasing by a mighty 171% in the last financial year and 60% over the December period.
The US has enjoyed particularly strong sales growth in handbags, which comes amid a slowdown at other brand owners and retailers, especially at the higher-end of the market. This is being put down to the brand’s position as an affordable luxury and it has also gained something of a cult status with the likes of Kylie Jenner, Jennifer Lopez and Paris Hilton seen wearing the brand.
Neil Clifford, CEO of Kurt Geiger, says: “These results underline Kurt Geiger’s transformation over the last decade from a predominantly UK shoe brand to what it is today; a global accessories brand with a cult following in the US and UK. With in-store and digital sales both hitting double-digit growth in the UK and US the group is delivering what customers want, namely accessible luxury combined with high quality, distinctive design.”
As well as the company’s expansion overseas it has also benefited from its UK store portfolio, which increased by eight outlets over the past year including a 2,900 sq ft flagship shop on London’s Oxford Street. This multi-channel approach is serving the company well judging by its recent results.
These outlets have enabled the company to showcase its handbags that have an average price of £250 for the Kurt Geiger signature leather handbag. Although this is no small sum it is a relative bargain compared with the luxury brands whose bags run into the thousands of pounds. Such is their value that a healthy second-hand market has emerged.
According to Rebag’s Clair report, those bags that are more expensive to start with tend to hold their value best. Leading the pack is Hermes whose £9,000 bags can be resold for 110% of their purchase cost. These are an exception and a result of constrained capacity at the family-owned business.
It is followed by Chanel where the bags retain 85% of their value when sold second-hand, and Dior at around 65%. The outlier in the market is LVMH whose £2,000 bags can be resold for around 90% of their original value. As sales of new luxury bags remain under pressure the market for second-hand models could prove to be buoyant.