Handbags

INDUSTRIAL CODES

NAICS: 31-6992 Women's Handbag and Purse Manufacturing

SIC: 3171 Women's Handbags and Purses

NAICS-Based Product Codes: 31-69920 through 31-69920131

PRODUCT OVERVIEW

A handbag is any type of bag or case that can be carried either by hand or over the shoulder. Such bags are traditionally marketed to women, who use these bags to carry their cosmetics, money, and personal belongings. Handbags and purses may be manufactured from a wide range of materials, including leather, denim, vinyl, and straw. Handbags also may be closed in some way, either by gathering up the straps, or with a snap or clasp. Some industry trackers have begun to include small totes and camera bags when analyzing the handbag category. Such items have traditionally been seen as luggage. However, as more people find cell phones, iPods, and other handheld devices to be necessities, the traditional definition of handbag is being expanded.

There are a number of different handbag styles. The bag's form or its material often dictates its name. According to DesignerHandbags101.com, a box bag is a hard-sided purse, square or rectangle in shape, with a metal, bone, shell, or wooden handle. An envelope purse is a flat, square or rectangular bag with a triangle-shaped top flap that folds over like an envelope. A half moon bag is any bag shaped like a half moon, with or without a handle. A canteen bag is a round, stiff bag that resembles a water flask. A bucket bag is shaped like a bucket, usually has an open top and shoulder strap. A baguette is a small, long, narrow bag that resembles a loaf of French bread. A quilted bag is characterized by its texture—quilted—and is usually carried with a strap or metal chain. An accordion bag consists of several small bags stitched together.

Some types of handbags are better known. A change purse is a small purse just large enough to hold loose change that can be sealed with a zipper, clasp, or snap. It is usually kept in a larger handbag. A clutch is a bag with no handles that must be carried clasped in one hand or under the arm. A satchel is a bag with a wide, flat bottom, zippered or clasped top, and two handles or straps. A tote bag is a medium sized bag with two straps.

The word handbag did not start being used until the twentieth century. The word purse has its origins in the Latin word byrsa and the Greek word bursa, according to the Oxford English Dictionary (OED). The OED defines a purse as "a small bag with straps or drawstrings that allow the bag to be closed and carried."

For centuries both sexes carried their valuables and personal belongings with them rather than on them. Both sexes carried pomanders in the sixteenth century, small mixtures of aromatic substances carried in a little bag. Pomanders were believed to prevent possible infections. Women also carried little bags of lavender to scent handkerchiefs. Women later carried chatelaines, which were a set of chains around the waist that might hold a pencil, keys, or a watch. Men might carry tobacco pouches or large wallets to hold money and documents. Valuables might also be placed into a leather pouch and secured to their belts for extra protection.

People carried their belongings because pockets were a later addition to clothing. The notion that pockets were intended to take the place of bags and satchels can be found in the word's formal definition. The OED defines a pocket as a "small bag or pouch worn on the person." Pockets first appeared on men's clothing in the late sixteenth century but were more problematic for women's apparel. Clothing tended to be form fitting in the seventeenth century; pockets would disturb the line of a skirt or dress. Women got around this problem by tying their pockets around waists (some did so until the mid-nineteenth century). The hoop skirt, which came into fashion in the early sixteenth century, was the first dress to incorporate pockets. Slits could be cut into the hoop skirt and pockets could be attached in the ample space beneath. When styles changed and women's apparel became tighter in the eighteenth century, women again began carrying their belongings in little bags called reticules.

Reticules were small, very feminine bags that could be used to hold rouge, face powder, a fan, a scent bottle, or smelling salts. Reticules could be purchased at local markets or estate sales, while many women made their own. Knitting was a popular pastime for women in the eighteenth century, and women could design their reticule to their liking. They could be made of velvet, lace, or other readily available fabrics.

The handbag industry would benefit from both labor and social changes in the twentieth century as women entered the workforce in greater numbers. Women's reticules would need to be larger and sturdier as they took vital accessories into the workplace. While needlepoint and embroidery certainly still existed, the Industrial Revolution meant that goods (including apparel accessories) could be produced more cheaply and quickly. Fabrics and materials became easier to produce and obtain, as retail and distribution lines became more robust. The apparel, leather, and textile industries expanded. Leather and trunk makers began producing small suitcases and leather bags for the first time. The word handbag appears about this time, to describe the leather bag a man might use to carry important papers and belongings.

Women were carrying what looks like a modern purse by the 1920s. This decade is sometimes called the Roaring 20s because of the changes in the entertainment and fashion industries brought on by economic prosperity. Some young women became known as flappers; they wore short skirts, bobbed their hair, drank alcohol, and expressed their disdain for social conventions. Women felt free to behave this way in part because of the recent success of the women's suffrage movement in the United States. The Nineteenth Amendment, which granted women the right to vote, had been passed in June 1919. It was also about this time that some designers began to open their influential fashion houses: Coco Chanel opened her first shop in 1912 in Paris, France; Prada was established in Milan, Italy in 1913 and Gucci opened in Florence, Italy in 1920.

Handbag and purse manufacturing would continue to be driven by fashion and cultural changes. During the 1940s, when many materials were needed for the war effort, handbag manufacturers started using wood rather than metal in the construction of the purse's frame. The apparel industry was under similar restrictions, as nylon and other fabrics were needed for the war. Women's fashions moved from the glamorous, flowing gowns of the 1930s to tailored suits. The war had another effect on the landscape. Millions of women entered the workforce, taking up jobs in factories and offices. Women would need handbags that were simple in design but also durable.

Designers pushed a return to a more feminine look in the years after World War II. This period was another one of economic prosperity for the United States marking the beginning of America's consumer culture as well as a number of important fashion trends such as saddle shoes, poodle skirts, and the stiletto heel. The decade also marked the appearance of two bags that were seen as trend setters and are still coveted by collectors: the Hermes Kelly bag and the Coco Chanel 2.55. Chanel's 2.55 bag, named for its February 1955 release date was a quilted bag with a shoulder strap and was a revolution in the fashion world. The bag was admired for its first-class construction but also for its design. A woman typically had to carry her purse by hand, even if it had a strap. With a strap long enough to fit around the shoulders, a woman now had her hands free. Chanel had to turn down numerous requests to make the bag because of the time spent manufacturing each one. In 1956 Grace Kelly appeared on the cover of Life using a Hermès bag to hide her pregnancy after her recent marriage to Prince Rainier of Monaco. The bag was later named the Kelly Bag. There was a six month waiting list to get a bag in 1956. In 2006 the crocodile bag cost between $10,000 and $60,000 and had a 3-year minimum waiting list. The bag reportedly takes 25 hours to manufacture.

The elegant, crafted purse was still very much in vogue in the early 1960s. However, by the mid-point of the decade fashions were changing quickly. The bouffant hairdo popularized by Jackie Kennedy began to fall out of favor with young women by 1967. Mary Quant popularized the miniskirt in 1965. Artists such as Andy Warhol and Roy Lichtenstein were part of the Pop Art movement, in which everyday objects such as Coca-Cola bottles and Campbell's soup cans served as the inspiration for art. Fashion and handbag design seemed to mirror this overall trend. Handbags were often constructed in unusual shapes and made of a wide range of materials: raffia, straw, wicker, vinyl, velvet, fur, crocodile, lizardskin, snakeskin, and patent leather.

The social and political unrest in the United States in the late 1960s continued into the next decade. People seemed to want to forget their problems. Sea horses, Rubiks cubes, and pet rocks were just a few of the novelty items that sparked people's interests in the 1970s. The wish to look beyond the nation's unemployment, high gas prices, and impeachment proceedings are best symbolized in the decade's most enduring symbol: the smiley face. The yellow graphical image was a highly stylized, synthetic version of a human face: just a circle, two dots and curved smile. The commercial use of the image is credited to Harvey Ball, who first used it on a button in 1963. But it wasn't until the early 1970s that brothers Murray and Bernard Spain put the image on mugs, T-shirts, bumper stickers, and purses.

The 1980s brought a return to more traditional, natural styles. The conservative preppy look was very popular: blue blazers, skirts, and button-down oxfords. This decade also is known for its emphasis on luxury. Shows such as Dynasty and Dallas were popular. The actresses' wardrobes helped make certain styles popular: shoulder pads, more jewelry (both precious and costume), heavily moussed or sprayed hair, and bright colors.

The 1980s also brought another It bag, a bag that women just had to have for its elegance and construction. One day in 1984, actress Jane Birkin was sitting next to Jean-Louis Duman, the president of Hermès, on an airplane. Birkin sketched her ideal bag for Duman; that sketch served as an inspiration for the Birkin bag. The bag costs $6,000, although the price can easily reach $80,000 due to its exclusive design. The Birkin as it is often called has become a status symbol among wealthy women. Both Martha Stewart and rapper Lil' Kim carried the bags with them when they went to federal court in 2004. The Birkin bag has one of the longest waiting lists of any luxury accessory—reportedly as long as six years.

A few trends caught on in the 1990s: parachute pants, the rise of sports apparel as everyday apparel, and bright colors. The Retro look was in, with fashions from the 1960s and 1970s once again becoming popular. The decade's major fashion trend, however, was grunge fashion. Grunge rock began about 1992, when Nirvana, Pearl Jam, and other bands from the Washington state area captured the interest of the country's young people. The artists and fans kicked off a fashion trend: torn blue jeans, tie-dye T-shirts, flannel shirts, Doc Marten boots, and body piercings. By the late 1990s, grunge music lost its influence. The clean-cut preppy look from the 1980s returned, particularly for teenage boys. Each of these fashions were reflected in their time by handbags that fit the look of the outfits being worn at the time.

Handbags have been the best-selling fashion accessory for some time. As an accessory, they follow the various trends of the apparel industry. However, as seen above, fashion trends change quickly. The tassels and kiss-lock closures that were popular on handbags in 2006 may not be so in the future. Certain rules seem to remain true, however. Women will always like neutral colored purses that can be worn with a number of outfits. They are also willing to spend heavily on the right purse, a purse with the right combination of style and craftsmanship that appeals to them.

MARKET

U.S. Industry shipments of women's handbags and purses fell from $250.9 million 1997 to $193.1 million in 2002, according to the U.S. Census Bureau. In 2002, approximately 63 percent of the handbags shipped were of leather or mostly leather construction. Only 3.3 percent were made of mostly plastic or vinyl in construction. Other types of bags (excluding those constructed of precious metals) made up the remaining shipments. From 1997 to 2002 the number of handbag manufacturers in the United States fell from 136 to 98, a drop of 27.9 percent.

During this period U.S. manufacturers were moving their operations overseas in an effort to control manufacturing costs. As the number of handbag makers fell in the United States, handbag imports began to creep up, from $1.05 billion in 1997 to $1.3 billion in 2002, according to figures from the International Trade Administration. Imports have increased steadily since then to $2.3 billion in 2006. China is the top provider of luggage to the United States, representing 67 percent of luggage imports in 2006. Italy and France, two countries that are home to many well-known fashion houses, are far behind. Italy was second with a 16 percent market share in 2006, followed by France with a 7.6 percent share. The United States exported only $17.6 million in 2006, mostly to Canada and Japan. However, shipments have improved steadily since 1996, when they were a mere $8.8 million.

Handbag manufacturing in the United States has been on the decline since the early 1980s. Figure 105 presents two decades worth of data from the U.S. Census Bureau on shipments by the industry it calls "Women's Handbag and Purse Manufacturing." The decline has been dramatic. In 2002 industry shipments were less than a fifth what they had been 20 years earlier. The industry is so diminished that for years after 2002, the Census Bureau has combined its reports on this industry with data for another shrinking U.S. manufacturing industries: luggage, personal leather goods, and leather goods. In the meantime, retail sales of handbags and purses have been healthy. Although handbags are being made in ever fewer numbers in the Untied States, they are being purchased in ever greater numbers. Accessories Magazine estimates that retail sales of handbags have climbed from $5.2 billion in 2002 to an estimated $6.9 billion in 2006.

There are several reasons for the increase in retail sales. Purses were once neutral colors such as blue, black or tan. One handbag might coordinate with a number of outfits. Women still follow this rule when making handbag purchases. However, styling has become more dynamic in recent years; women choose handbags that are more unique and express their own individual tastes. The industry has also become so competitive that there are many different styles for a woman to choose from. Due to these trends, women are buying more handbags. According to Coach Inc., in 2005 the typical U.S. woman purchased four handbags, nearly double the number she purchased only five years earlier. In addition to buying a greater number of handbags, the price of the bags purchased appeared to be no obstacle. The price of a luxury bag increased from $500 to $1,000 during the period 2001 to 2005, according to the President and CEO of high-end retailer Bergdorf Goodman.

A bag is considered a luxury or designer bag based on its price and the price will generally vary depending on the materials used to produce the bag. Luxury bags have approximately 43.5 percent of industry sales, according to industry estimates. Figure 106 provides prices ranges for handbags by category widely available in the United States in 2007.

Coach reported that its share of the luxury bag market improved from 17 percent to 23 percent in 2006. Analysts believe it has found success by combining fashion (assorted colors and styles) with function (incorporating laptop and Blackberry storage, for example). Another key to Coach's success is its retail prices. An average bag costs approximately $250, making it a luxury item while remaining affordable to many. It was the second most-reported brand of handbag owned by women in 2006, according to a study by Cowen & Company.

Designers periodically produce exclusive products in the hopes that they will become the next must-have status symbol. Louis Vuitton introduced the $42,000 Tribute Patchwork handbag in late 2006. The Lana Marks Cleopatra Clutch in alligator comes adorned with 1,500 black and white round diamonds. Only one clutch is made for retail each year; it retails for $100,000. The Hermès $148,000 Birkin in croc porosus lisse was the most expensive bag available in 2006 because of the rare leather used in its making and also because of the nine carats of diamonds set in white gold and placed on its clasp and lock. This bag is custom made.

KEY PRODUCERS/MANUFACTURERS

Coach

The industry leader designs and markets a number of apparel accessories, including handbags, outerwear, electronic accessories, luggage and small cases. The company sells its products in nearly all retail channels, including catalogs, online stores and company-operated retail and factory stores in North America and Japan. Its products are also available in department stores and specialty retailers. As of July 1, 2006, it operated 218 retail stores and 86 factory stores in North America; and 118 department store shop-in-shops, retail stores, and factory stores in Japan. Coach, Inc. was founded in 1941 and is based in New York, New York. It has 2,300 employees and earned $2.4 billion in its fiscal year ended July 2006.

Dooney & Bourke

This maker of high-end women's handbags is sold in online stores, in catalogs and in de-partment stores. It operates seven of its own stores nationwide, including a flagship location in Manhattan. It also has stores in Tokyo, Japan and Old San Juan, Puerto Rico. In addition to handbags, the company manufactures cellular phone cases, iPod cases, hats, jewelry, luggage, men's and women's apparel, shoes, tote bags, and wallets. It generated $6.2 million in revenues in 2005 and had 104 employees.

Liz Claiborne

The company designs and markets a number of products, including handbags, men's and women's apparel, jewelry, and fragrances. Its products are available in department stores, specialty retailers, catalogs and online vendors. It had 17,000 employees and revenues of $5 billion its fiscal year ended December 2006. The company was founded in 1976 and is based in New York.

Louis Vuitton Moet Hennessy (LMVH)

LMVH is the world's largest luxury goods company. It makes wines and spirits, perfumes, cosmetics, fashion and leather goods, watches, and jewelry. Some of their well-known brands include Dom Perignon, Moet & Chandon, Christian Dior, Givenchy, Donna Karan and TAG Heuer. The company reportedly had 61,088 employees and revenues of $16.4 billion in 2005.

Nine West Group

The company is known largely for its footwear, but it also has a successful line of handbags and apparel. It operates approximately 600 of its own retail stores in addition to being available at department stores, specialty retailers, and independent shoe stores across the United States. The Jones Apparel Group acquired the company in 1999. Jones Apparel Group generated revenues of $4.6 billion in 2006.

MATERIALS & SUPPLY CHAIN LOGISTICS

Many manufacturers began to move their operations out of the United States in the 1990s. The handbag industry shared many of the same problems experienced by the apparel and leather industries to which it is connected. The industry suffered from high production costs because of the labor-intensive nature of handbag manufacturing. Overseas markets offered a large pool of non-unionized workers and also offered access to more plentiful materials and at lower costs. Also, with the increasing globalization of the international community, it was advantageous for companies to expand into developing markets that were hungry for new products. This was particularly the case for fashion, where certain luxury names appeal to women of all cultures.

Leather production grew in China and the other countries to which U.S. manufacturers were shifting their operations. China produced an average of 4.8 million bovine hides and skins annually from 1984 to 1985, according to World Trade Organization statistics. Bovine hides and skins are processed into leather. By 1990 China produced 9.3 million hides. In 2000, the figure was up to 40.1 million. India's production increased, although not as dramatically as China's. The country manufactured 36.1 million pieces in 1990; a decade later, production was up to 40 million. In terms of the overall leather goods trade (including footwear) the Far East had 15.7 percent of the market from 1984 to 1986, according to World Trade Organization statistics. By the period 1999 to 2001, that figure had more than doubled and stood at 33.7 percent.

Overall costs may be lower for U.S. businesses in these countries, but there are still other considerations. The animal hides must be obtained and then processed into leather in tanneries. From there they must be manufactured into leather goods and shipped back to the United States. This supply process is affected by the quality of hides, the general infrastructure available in the country (from roads to ports and machinery), and potential environmental problems that might be created in the leather treating and manufacturing process. The discovery in the middle of 2007 of large numbers of toys imported from China by Mattel that had been painted with lead-based paints served as a wake-up call to manufacturers in many industries who use contractors in China to produce their products. Internal testing and oversight of contractors and suppliers is a not insignificant cost that must be born by the primary manufacturer.

DISTRIBUTION CHANNEL

Companies generally manufacture handbags along with some other product: luggage, clothing, scarves, or watches, for example. Because of this, handbags benefit from the well-established distribution networks created by the large apparel and leather industries. They are available in nearly every retail channel.

Some specialty retailers went through tough times in the 1980s and early 1990s. By the middle of the decade the country was enjoying strong economic times and many people became affluent. This increased affluence—wealthy consumers willing to spend money—helped to spark change in the retail industry. Specialty retail blossomed and the discount store industry took shape.

Some of these new specialty goods retailers were stores selling luxury goods. Many luxury goods makers decided to expand their product lines in the 1990s to capitalize on consumer interest in luxury items. They moved into retail channels which were previously not available or opened stores selling their own branded goods. Coach Inc., the leader in the luxury handbag category, is an example of a company that found success by expanding into fine apparel, accessories, handbags, and luggage. Handbag makers Kate Spade and Kenneth Cole also opened their first shops in this decade.

The handbag industry became fragmented and increasingly competitive. A woman might purchase a quality purse through a catalog, at a high-end department store, specialty retailer, discount store, or on the Internet. Many of the specialty retailers opened an online site to go along with their regular brick-and-mortar stores. There are numerous third-party vendors that sell designer handbags online as well, often at discount prices. The Internet has been a source of innovation to the handbag trade. Amazon.com launched the site Endless.com in January 2007 in response to shoppers' requests. Women can search for a handbag by designer, color, style, and numerous other criteria. Some Web sites allow women to rent designer bags rather than go to the expense of purchasing them. The Web site Bag, Borrow or Steal allows women to rent bags for $19.95 to $249.95 per month, depending on the subscription plan. One customer on the site described the service as addictive.

In short, handbag makers typically get their product to the consumer in one of four ways: through its own branded stores, any of a number of retail stores, the Internet, or catalogs. According to estimates by Credit Suisse in its Brandscape 2007 report, department stores represent 30 percent of handbag sales. Specialty stores and mass merchants each account for 20 percent of the retail market for handbags. Specialty chains follow with 15 percent of the market. Other types of stores took the remaining 15 percent of sales.

The competitive market hasn't dissuaded some entrepreneurs have from starting their own handbag businesses. One professor at the Fashion Institute of Technology estimates it takes some good designs and approximately $50,000 for an industrial sewing machine and various materials to get started. It can be formidable to gain a foothold in such a competitive market. However, the rarity of a bag can actually add to its desirability. Kate Spade and Coach are two companies that began as very small operations and then found success through expansion.

KEY USERS

According to Cowen & Company, Japan is the largest market for luxury handbags. Japanese women typically own more handbags than American women (6.10 vs. 5.48 in 2006) and use their handbags more often (2.36 versus 1.92 times per month in 2006). However, Japanese women expressed plans to curtail their handbag spending in 2007. American women 26 to 55 years of age planned to double their purchases in 2007. This age group encompasses those most likely to be working and interested in fashion, and are most likely to be employed and to need a handbag for carrying personal items to and from the workplace. Ownership of handbags varied by education level. In the United States, a woman with a college education owned an average of 6.3 bags in 2006, two to three handbags more on average than her female counterpart without a college degree. Women in the Southwest, Mid-Atlantic, Southeast, and Northeast regions owned more purses than women in the Northeast, West Coast, Plain States, or Mountain regions.

Although women are by far the predominant users of handbags, there may be a growing number of men interested in carrying handbags in Europe, according to a 2006 Guardian article. Bags designed for men are usually leather in construction. Some are roomy enough to be mistaken for laptop cases or briefcases, while others definitely are not. American men will probably dig in their heels at the thought of slinging a handbag over their shoulders. More then a few people rolled their eyes when Metrosexuals—heterosexual men who devote a great deal of time and money to their appearance and overall lifestyle—began to populate the country in 2002. Many men felt inspired by celebrities Brad Pitt, David Beckham, or the hosts of Queer Eye for the Straight Guy to embrace their feminine side. The term also spawned the term retrosexual, a term used to describe a man who has no interest in fash-ion, moisturizers, or culture. With such derisive terms, will American men ever feel comfortable purchasing a handbag for themselves? Will they have to carry around their phone, Blackberry, iPod, and countless other items while women, Louis Vuittons in their laps, smirk from the sidelines? There is anecdotal evidence from some high-end retailers to suggest that male handbag sales are up. The first step in marketing, of course, is a catchy name. The Manbag is perhaps the most common and the most likely to induce cringes; it was first used on an episode of Friends in 1999, not long after Prada debuted one of the first handbags for men in 1998.

ADJACENT MARKETS

Handbags are just one product made from finished leather. Other items include outerwear, luggage, footwear, wallets, and upholstered furniture. Leather tanning can be traced back thousands of years. The industry has been on the decline in the United States for a number of reasons, including the cost associated with production. As a result, the high retail cost of quality leather goods is out of reach for many consumers. Also, the changing culture in the United States means certain leather products (saddles, for example) are no longer in high demand. The Census Bureau estimates that the number of establishments devoted to leather production and tanning fell from 357 in 1997 to 262 in 2002. The value of shipments has declined from $3.3 billion in 1997 to $1.9 billion in 2005. Handbags represent only a fraction of the end market for leather. Nearly three quarters of leather production is used to manufacture footwear, garments, and gloves.

Handbags are the best-selling fashion accessory for women, according to Accessories Magazine. Industry tracking firm NPD Group reported that the women's apparel market generated sales of $101 billion in 2005. Women's accessories (including hats, scarves, belts, sunglasses and other goods) represented approximately $30.2 billion of that total. As stated, apparel manufacturing is increasingly done overseas. The Census Bureau notes that that there were 6,249 establishments in the United States devoted to making women's, girl's, and infant's apparel in 2002, down from 7,126 in 1997.

RESEARCH & DEVELOPMENT

Designers have introduced a number of new features to handbags. Some purses now include storage specially designed to carry iPods and personal digital assistants. Interior lighting is a popular new feature. Manufacturers are looking into ways to incorporate biometric technology; with such technology a person carrying a handbag would use a thumb or eye scan to access her purse. The technology would be used to deter pickpockets.

Research and Development into new materials is also an area of interest for handbag designers and manufacturers. An increasing awareness of issues surrounding the responsible management of the environment are partially responsible for this effort to identify new materials for use in making handbags. The use of recycled materials is one area of particular focus in this effort.

CURRENT TRENDS

The apparel and handbag industries have struggled with the issue of piracy for some time. Handbags, wallets, and backpacks represented approximately 9 percent ($4.3 million) of all counterfeit goods seized by the U.S. Customs and Border Protection Service for the first six months of 2006. This is a fraction of the roughly $200 billion in total goods thought to be counterfeited each year. However, these are confiscated handbags. The counterfeit handbag trade is estimated to be worth billions. Handbag designers Louis Vuitton, Chanel, and Burberry regularly appear at the top of annual lists of most counterfeited brands. Vietnam, Thailand and China are just a few countries thought to be major producers and consumers of counterfeit handbags and other goods.

Fake goods were once sold on street corners. Now such products are sold on online retail sites, auction site eBay, flea markets, and well-known accessory shops. Some knockoffs are easy to spot. They offer inferior stitching, substandard materials, and, in the worst cases, misspellings on the designer label. Often the price is a giveaway as well. Counterfeit goods might cost one-sixth of the regular retail price; an authentic Chanel handbag retails for approximately $1,500, while a fake may cost approximately $60. Some counterfeit goods, however, are well-made and retail at high prices.

Counterfeit bags sell well for a number of reasons: women get the satisfaction of having a status symbol bag that may pass for the real thing. There's also some psychological satisfaction that the woman has gotten away with something by not having to pay the high cost of the designer label.

One problem in combating the trade in counterfeit goods is that apparel and handbags are not protected under the U.S. Copyright Act. Some have argued that the industry doesn't need such protections, and that it may ultimately stifle creativity in the industry if designers are not allowed to copy designs and find inspirations in each other's work. There are laws in place to protect apparel designers in Europe, although it appears to have had little effect on design copying.

Representative Robert W. Goodlatte (R-Virginia), with six co-sponsors, introduced the Design Piracy Prohibition Act in July 2006. This bill would extend copyright protection to fashion designs for a period of three years. The bill would amend the Copyright Act of 1976. The Act would extend protection to "the appearance as a whole of an article of apparel, including its ornamentation," with "apparel" defined to include "men's, women's, or children's clothing, including undergarments, outerwear, gloves, footwear, and headgear; handbags, purses, and tote bags." In order to receive the three-year term of protection, the designer would be required to register with the U.S. Copyright Office within three months of going public with the design.

TARGET MARKETS & SEGMENTATION

According to the Census Bureau there were 120.9 million women aged 15 years or older in the United States in 2005. This represents a large market for handbag makers. Many women have more than one handbag and acquire more than one per year. A consumer goes through a complex process when she considers a purchase, usually finding some middle ground between practicality and emotional investment.

A survey conducted on drugstore.com offers some insight into women's motivations for purse shopping. Forty-six percent of respondents chose the handbag they currently carry because it is functional and well organized. Only 18 percent claimed to have selected a handbag because it was fashionable or trendy; four percent cared most about color; and seven percent looked for a specific brand name.

RELATED ASSOCIATIONS & ORGANIZATIONS

Accessories Magazine, http://www.accessoriesmagazine.com

Coach Inc., http://www.coach.com

Leather Industries of America, http://www.leatherusa.com

Louis Vuitton, http://www.louisvuitton.com

National Fashion Accessories Association, http://www.accessoryweb.com

BIBLIOGRAPHY

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"Historical Statistics for the Industry: 2002 and Earlier Years." Women's, Girl's, and Infant's Cut and Sew Apparel Contractors: 2002. U.S. Department of Commerce, Bureau of the Census, Economics and Statistics Administration. December 2004.

Montgomery, Elizabeth and Eric Nanes. 2007 Handbag: U.S. and Japan Markets Look to Different Paths. Cowen & Company. 9 January 2007.

Nolan, Kelly. "When it Comes to Accessorizing, It's in the Bag." DSN Retailing Today. 27 February 2006.

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Saad, Omar. Brandscape 2007 Sector Review. 28 February 2007, 58.

"Top 25 Export Destinations for Handbags." U.S. Department of Commerce, International Trade Administration. 15 February 2007. Available from 〈http://www.ita.doc.gov〉.

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"Value of Shipments for Product Classes: 2005 and Earlier Years." Annual Survey of Manufactures: 2005. U.S. Department of Commerce, Bureau of the Census. November 2006.

"When It Comes to 'Purse-onality' Women Have it in the Bag." Business Wire. 14 September 2000.

"Women's Handbag and Purse Manufacturing: 2002" 2002 Economic Census. U.S. Department of Commerce, Bureau of the Census, Economics and Statistics Administration. December 2004.

see also Luggage; Shoes, Non-Athletic; Women's Apparel