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Private label accessories versus designer brands
While private brands showed growth last year, our panelists have mixed opinions about their impact on licensed and/or designer product. “Consumers still crave designer brands,” says Davidowitz. “Look at Louis Vuitton—the explosive growth continues to be in status.” That said, however, brand appeal applies mainly to higher-end merchandise. At moderate price levels, private label still has the edge. “Consumers who cannot afford the most expensive handbags still want to look as if they can,” says Brean Murray Carret’s Beder. “They opt for private label, which offers reasonable likenesses at lower prices—and at a faster pace than ever before.” Beder also foresees continued growth in this sector, with stores either increasing or creating their own brands, or adding designer exclusives.
Designer exclusives for retailers—especially at mass retailers such as Target, or even mid-tier department stores such as Kohl’s—also showed growth last year. Feller points out that Vera Wang’s collection exclusively for Kohl’s now serves as a private label brand, adding that stores generally seek more private label merchandise when they’re chasing margins. Kohl’s Vera Wang program has largely succeeded, but if designer exclusives fail, stores quickly return to national brands to get sales stirring again.
Most Accessories’ panelists agree that private labels do not pose a serious threat to national brands. In fact, more private label brands on mainfloors means licensed and designer products simply “need greater sales concentration, almost like concentrated laundry detergent. The package may be smaller, but it’s just as powerful—with greater impact at the point-of-sale,” says Cohen. “The consumer needs to see familiar national brands in ‘their’ store to bring them in with specialization and select offerings from that brand. It’s up to these brands to find ways to maintain that connection with consumers.”
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