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Channel Checks Show Kate Spade Is Leading In Handbag Sales

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Channel Checks Show Kate Spade Is Leading In Handbag Sales

Wedbush said channel checks show Kate Spade & Co (NYSE: KATE) remains the top performer in the handbag sales this holiday season despite a lukewarm response for its “Miss Piggy” and “Imagination Monster” collections.

'Relatively Sluggish' Handbag Space

That said, the checks show the handbag category was relatively sluggish month-to-date in December, with all three retailers — Kate, Coach Inc (NYSE: COH) and Michael Kors Holdings Ltd (NYSE: KORS) — raising promotions, in differing ways.

For Kate Spade, analyst Morry Brown said promotions were modestly higher, but traffic appears to hold up relatively well.

Kate Spade launched its December collection, “Disney Miss Piggy” and “Imagination Monster.” The analyst said initial response to the new December collection appears mixed so far versus strong sell through and response to November’s “Make Magic” collection.

“Overall clearance levels seem to have increased slightly and items on markdown include the Cameron Street Neema backpacks, Cameron Street Byrdie bags, and the Skyline Way glitter handbags,” Brown wrote in a note.

Peers In The Space

Among rivals, Coach ran its “Winter Sale” in line with last year, but checks indicate the event was viewed by customers as more exclusive and under the radar last year versus this year.

Brown said peer Michael Kors ran its “Holiday Sale Event,” which was marginally deeper year-over-year. The handbag maker ran a tiered promotion starting at spend $250 receive 25 percent off versus spend $250 get $50 off the purchase.

Shares of Kate Spade closed Monday’s trading at $14.48, Coach ended at $35.28 and Michael Kors closed at $44.85.

Image Credit: By Paul Keleher (originally posted to Flickr as kate spade) [CC BY 2.0], via Wikimedia Commons

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Nov 2017SusquehannaInitiates Coverage OnPositive
Oct 2017BairdMaintainsOutperform
Oct 2017BuckinghamMaintainsBuy

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