Even with a stabilizing economy and improving accessories sales, vendors are still wondering if the price is right, as consumers maintain a tight grip on their cash.
According to Adrienne Vittadini Handbags president Barry Kramer, the accessories firm changed its pricing “substantially” over the last year to roughly $200 to $400, from $480 to $580.
With a “sweet spot” of $248 to $298 that customers are responding to, Kramer said: “We definitely turned a corner now that the dust has settled.”
Even though sales were flat this year, Kramer expects about a 15 to 18 percent increase in 2010. “We don’t want it [the product] to be another dumb, basic bag. We don’t just want to fit into a price,” he said, explaining that, while price has played a role in the company’s strategy, he sees today’s new challenges as beneficial to the creativity of the brand in terms of sourcing and creativity.
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Aside from price, Kramer said he’s “more sensitive to inventories” as customers are “buying closer to need.”
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Patti McKillop, chief executive officer of Potluck Paris, a Seattle-based jewelry vendor, noticed the same trend. Sales on average are down 5 percent from last year because the business lost some “marginal customers.”
“I did feel like a lot of our smaller stores were more price sensitive,” she said, adding she was able to retain her regular accounts.
“The biggest difference is that instead of one $5,000 order, I am getting five orders of $1,000, for example.” She explained that many of her orders came in closer to Christmas than in previous years.
“A lot of customers did not have the confidence that they would sell through their orders,” said McKillop, who offers imported mixed-metal jewelry from Paris and Italy that retails between $30 and $300. “We really strive to get lowerend items because it makes us nervous if everything retails at $200.”
Consumers of Vera Bradley, an accessories firm that specializes in handbags, travel items, luggage, stationery and eyewear, also gravitated toward lowerpriced items.
“We’re glad we can offer a [quality] product and not at a ridiculously expensive price,” said spokeswoman Melissa Schenkel, who noted prices generally range from $10 to $130.
During holiday, Vera Bradley consumers “trended toward purchasing fewer high-priced items and more lower- priced items,” such as zip ID cases, lanyards, all-in-one wristlets, she said, adding large duffel bags, which retail for $80, performed well, too.
Schenkel said the firm saw sales improve slightly against last year, and opened six Vera Bradley store as well as 500 new wholesale accounts last year. The company has 28 stores and about 3,500 wholesale accounts.
While business has stabilized at the lower-end, high-end designers, like Michelle Cravens, who owns the luxury accessories company Michelle Monroe Studios, said improvement is a little slower.
“I see the consumer picking up,” she said. “It’s not setting the world on fire, but we’re off to a better start.”
Cravens, whose company is best known for its large leather and feather handbags, said she has been getting reorders and sees sales improvement over last year.
“If people are going to be spend money, it’s going to be on jewelry or handbags versus apparel,” she said, noting that typically, her buyers are able to sell her handbags, which retail from $300 to $670, to their most “reliable” customers.
“Retail is still kind of leery,” she said, explaining that while some of her clients “reorder big,” others have the customer pay ahead of time before they place their orders with her.
In general, Cravens said, consumers are still “conscientious” when it comes to spending. In order to help grow her own business, she recently launched a lower-priced jewelry line, which she showed in September at Coterie in New York. The price range of the jewelry is $35 to $300, but 85 percent of the collection is under $100, she said. Her biggest seller is a large, $65 ring adorned with Crystallized-Swarovski Elements.
“The price point [of the collection] is good with what we’re going through,” she said. “It’s going to get me