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Retail Chatter #7

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The Business of Shoes and Bags

It doesn't take much to update an outfit from past seasons. Some women have said, "The power of a new pair of shoes or the bag of the season, does the trick every time." Based on reports from the Global Industry Analysts, the U.S. handbag business alone, will reach nine billion by 2015. It's no wonder why brands such as Michael Kors, Chanel, Dior and now Valentino continues to open accessory stores selling only handbags, shoes and small leather goods.

Saks 5th Avenue made the investment a couple of years ago to devote an entire floor to just shoes, which boasts its own zip code. This has made it much easier to shop for all looking to satisfy your passion for shoes. Barneys NY also made the investment into renovating an entire floor to showcase their extensive shoe collection. With all the upgrades, there is no doubt that these categories will continue to explode.

Not everyone today can afford to step up their luxury game. Shoe prices come with an average tag of $495, and handbags starting at $895 without any trace of bells and whistles; this has only paved the way for brands like the Michael Kors of the world.

In fact, the growth of Kors' handbag business has opened the doors for the creation of affordable luxury with plenty of room for other players to step in. A recent article in the Wall Street Journal mentioned that the price of a Chanel quilted bag in the past five years have increased by 70 percent, to a whopping $4900.

As consumer experience change and their lives and priorities continue to shift, coupled with the price of Luxury brands like Jimmy Choo, now face an increase in price for raw materials. Naturally this trickles down to us the consumer, which forces us to fork over even more cash for the same pair of shoes purchased just one year ago.

You have to imagine why today it's so easy to find many new accessory stores pumping out knock-offs of designer shoes and bags, all for a fraction of its original brands. It's no wonder why more women are in search of finding the best replica at the right price.

To further confirm this truth, I met a friend for breakfast who showed up in an amazing pair of the Jimmy Choo ad campaign shoes. I had just seen those same gladiator sandals in the store window, which were also featured in every fashion magazine. I complimented her and without hesitation she proudly confessed that they were from Zara at a price of $65.00. That's a far cry from the $750.00 price tag of what the designer house is asking. Although the luxury customer would still rather pay the price to have the brand name, there is also something intriguing about seeking out a good faux all for the art of finding that deal.

Another article states that the counterfeit business for designer shoes and handbags continues to soar, so at a glance, all the fake Chanel, Hermes and Gucci bags that fill most of our street corners, and believe me some do look as good as the real thing! To hear of the staggering amount of counterfeit rings that are broken up yearly, it only proves that because accessories are more of an emotional purchase, and one can never have enough.