The Bizarre Economics of Luxury Handbags

[@wallstreetmillennial]

👉 Head to brilliant.org/wallstreetmillennial/ to start your free 30-day trial and 20% discount on your annual premium subscription.

[@clarkewithe]

Ah finally, a WSM featured company that managed to go broke *without* merging with a SPAC!

[@cznyx]

And due to private equity

[@ktktktktktktkt]

I guess you could say Capri was left holding the handbag :)

[@Tie509]

Boooooooo

[@Bokanet]

😂

[@notanicebear]

Slow clap

[@laughingman7882]

It's crazy you can find someone to hand make you a truly high quality item for less than you can buy a mass production item calling itself luxury

[@joez.2794]

If people want to pay more for the inferior mass-produced item, what does that tell you about most desirable characteristic of the item? That's right - it's the HIGH PRICE ITSELF. So what should we do about it?

[@itsajungle22]

@@joez.2794conspicuous consumption

[@filippxx]

Yes, but nobody will know that you own a high quality hand made item, while everybody will know you have enough money to afford 10k handbag.

[@Mikk-t2o]

Ya but that's changing.with many people struggling b n a hi roller dosent make u look rich it makes u look like a narsasis a hole.b n smart with money is back in fashion just like granny n grampa

[@Mikk-t2o]

I just don't get it.u got b real sholow 2 play big shot.i mean if your ok with wasting big$ on yourself knowing 100s of children die everyday from poverty.what does the mirror on the wall say about that.

[@fix0the0spade]

When I worked at Walmart we used to sell Michael Kors, you can't be sold at Walmart and expect to be taken seriously as a luxury brand.

[@iu2]

Please use proper punctuation marks.

[@entezami777]

@@iu2 buy McDonald’s

[@fix0the0spade]

@@iu2 You first.

[@dougsheldon5560]

Innovation in handbags? Oh, you were serious.

[@jimbolambo103]

It's got a new hat!

[@LiveWireBT]

13:10 I'm German and I have to say I have never before seen charts colored like this. 😆

[@SH-ly1uy]

Michael Kors is not luxury. It’s wannabe

[@incyphe]

There are dozens of handbag makers in the $100-$1000 range... Polene, DeMellier etc. The problem is, the brands that Tapestry and Capri own have heavy retail presence, whereas most quality hangbags in the 100-1000 range are mostly online.

[@iu2]

9:22 "they argued that the combined company would have more resources to invest in product innovation." Innovation in what? Handbags? What could they possibly innovate? Handbags haven't changed since the invention of the zipper....over 100 years ago. Before that, handbags were essentially the same for centuries. Don't ever be foooed by these mergers. They are NEVER good for the consumer.

[@Tuppoo94]

These bags cost a couple of bucks to produce, but the companies want hundreds of dollars for them. Unsold inventory is destroyed to maintain scarcity. And we're supposed to believe that they care about consumers. Oh well, I guess the joke's on us in the end, because consumers keep paying those ridiculous prices.

[@iu2]

@Tuppoo94 Agreed.

[@wendypierce5621]

I’ve had a couple Michael Kors bags and they fell apart pretty quickly. Accessible is a weird niche, I don’t know if people stay there, it feels more like you’re on your way up or down.

[@itsajungle22]

Right? Early 20’s or poorly planned 40’s.

[@jamesodell3064]

My wife has a very nice no name real leather handbag. Probably cost about $100. We can afford any handbag out there, but she does not. One of the reasons we can afford them is because we don't buy things for their status value, just quality products that will last.

[@joez.2794]

"Luxury hand bags" are pretty much at the extreme opposite end of things that might require government price controls in an otherwise free market.

[@etuitivemillionaire]

When you got it you don't need to draw attention to yourself with gimmick handbags.

[@judyArsh]

The sad truth is all these companies make their money off poor people trying to look rich.

[@etuitivemillionaire]

Poor people stay poor by trying to look rich and rich people stay rich by trying to look poor.

[@samsonsoturian6013]

@@judyArsh Supplying the vice doesn't make the vice

[@ninakore]

Same with luxury cars

[@testshoot]

Lux bags are like factory store things, a lot are manufactureed by a third party at high volumes to have a label sewn in for mark up and to sell to social climbing middle class folks that think large logos = class. Conspicuous consumption. Guess started this type of movement by taking things they didn't make, putting their label on them and then basically becoming a licensing company.

[@Nocturnalux]

My handbag is a gothic cat’s face with tiny bells. I love it. It was very cheap but it is not common and completely “me”. Wouldn’t trade it for anything.

[@djmartens123]

Well I just found a wallet on the ground and started using it. Beat that.

[@iu2]

😂😂😂😂😂

[@camacho_67]

Love the quality of your videos.

[@chenclau]

lina khan is so based for this

[@WeGoToMars]

Sad that her time has ran out

[@sarikagoode1505]

@@WeGoToMars As soon as they get rid of her, I predict we’ll see companies merging into astronomical proportions.

[@Josh-tf9cr]

No, she ruined a company

[@Jeez001]

But she left Microsoft buy Activision because it paid her off

[@sarikagoode1505]

@ She didn’t. A federal judge did.

[@klariskb4497]

People who use these brands just give away their financial insecurity. Little to no value added - just cosmetic. Rich people would not bother to show off with LV. The buyers need to understand it gives them the opposite image perception than they intended.

[@grahamjones5400]

Except for ensuring the safety and quality of stuff we need to live, people should make as many knocks of luxury crap as possible.

[@samsonsoturian6013]

Fun Fact: Women didn't start carrying purses until within the past century. Back when women wore elaborate dresses they had huge pockets sewn into them.

[@joez.2794]

And now we need the government to "protect" them from "price gouging" on an item already naked up 5000% - what a country! And what does that say about women?

[@JJ-zr6fu]

Yes let’s make women wear those dresses again to stop them from spending their own money

[@samsonsoturian6013]

@@joez.2794 goofball most women just own whatever cheap purse they fancy

[@GFreeGamer]

I remember how we referred to the 'Accessible Luxury' audience as Mass-tige back when I was in marketing.

[@lipstickzombie4981]

Masstige is a familiar term in cosmetics and perfumes as well.

[@ravanne3746]

I have stopped buying designer bags because the quality has declined noticeably over the past few years while prices have increased. While on vacation in Spain this autumn, I bought an absolutely gorgeous handmade leather handbag for around 200 Euros ($215 US). It is well made, with quality materials and except for a discrete brass makers mark, no visible logos. I get to have a beautiful bag that I will enjoy wearing and not end up as a walking billboard for a company. And I don't feel the need to impress anyone by showing off that I would spend a ridiculous amount of money on something that I toss my car keys into.

[@brandenburton2524]

It’s dumb antitrust case. Luxury and semi luxury brands? You don’t have to buy them. And if they corner the accessible luxury handbag market and raise prices. New brands with lower prices will take their place.

[@samsonsoturian6013]

The prosecutor is an old rich woman

[@SARGEinc]

In my 36 years on earth, I've never once even noticed what handbag someone was carrying.

[@pauldavidartistclub6723]

Absolutelyit should have been blocked, as most mergers should be.

[@DeviousDumplin]

The FTC literally invented the "accessible luxury" segment specifically for this lawsuit. Patrick Boyle makes fun of this suit to no end because it manufactures a market segment in order to create an excuse to block the merger. This is despite the fact that there are dozens of luxury brands competing for marketshare with no appreciable competitive advantage. I honestly think that this comes down to Lina Khan specifically being a consumer of luxury hand bags, and this is her pet case.

[@AliasHSW]

Never understood the appeal of MK. IMO it never vibed luxury to me but more a wannabe. Same with Kate Spade

[@jean-francoisturcotte6275]

Wow. Talk about essential goods.

[@somethingsomethingsomethingdar]

I’m a big fan of Khan. If the big corporations hate you, you’re probably doing your job right.

[@AlexanderTheGoodEnough]

Until you piss Boeing off. Then it's the end of the line.

[@samsonsoturian6013]

Found the shoplifter. And no, the idiot DEI hire only cares about prosecuting brands she is personally familiar with

[@samsonsoturian6013]

@@AlexanderTheGoodEnough Shut up, pothead

[@somethingsomethingsomethingdar]

@ so basically you are a racist business owner with nothing better to do. Good for you. Guess you fear someone who looks different from you coming after your business right?

[@joez.2794]

Her policies make sense. In Russia. It's hard to imagine a retail good consumers need LESS than luxury handbags, or how somebody of at least average intelligence might come to the conclusion the free market won't sort it out.

[@jordankendall86]

I think the FTC is very short sighted in not recognizing that the merger would have allowed better global competition. However, I believe that it was stupid that Tapestry kept records of how the acquisition would help them reduce discounting. They should have known better that this could be used against them. It is common knowledge for those that work in corporate America that you have to be careful about your communication about large public acquisitions.

[@noodlechrist4958]

2:45 Thank you for telling me what a handbag is. But really, good contents as always!

[@AndrewBrown-fq6vp]

I don't understand why Tapestry wanted to buy Capri when they were in a better position to start with and Capri slowly failing? Buying them just to stop discounting on similarly priced bags shows they don't understand their own market. People buy an MK bag over Coach or Kate Spade because their circle of friends are influenced by MK rather than Coach or Kate Spade not what it costs therefore they just wanted Capri so they could charge people more for all their bags is exactly why anti trust laws were set up! Why would you then say all that in memo's which have to be turned over to the courts? I think Tapestry knew the merger would fail so when it did the smaller company would wither and die as investors pull out which is exactly what is happening. Then pick up the brands it wants from a bankruptcy sale saving a lot of money and killing the competition!

[@grahamjones5400]

We need a hand bag SPAC!!

[@AlbertEmma-b7l]

Thank you Lord Jesus for the gift of life and blessings to me and my family $14,120.47 weekly profit Our lord Jesus have lifted up my Life!!!🙏❤️❤️

[@AlbertEmma-b7l]

Sure, the investment-advisor that guides me is..

[@AlbertEmma-b7l]

Mrs Joyce kim

[@ghazanferfazli7335]

Same, I met Joyce kim last year for the first time at a conference in Wilshire, after then my Life has changed for good.God bless Joyce kim

[@MichaelLinda-r7u]

Her services is the best, I got a brand new Lambo last week and paid off my mortgage loan thanks to her wonderful services!

[@markdennis5910]

😱Sounds familiar, I have heard her name on several occasions.. and both her success stories in the wall Street journal!

[@EverlastingMosfer]

I was in Gucci today and the SA told me they can’t often tell the difference between the authentic and kislux 's bags. Surprised to hear that from an SA.

[@CoreyChambersLA]

There's nothing bizarre about the age old fact that women buy luxury handbags to make a fashion statement and a wealth statement.

[@2Large4U]

Great video. "First world problems" was the main theme I felt the whole time lol

[@FullLengthInterstates]

Sounds like an inside job for the buyer to block the sale. No opinion on handbags but I do think we need a better alternative to letting mergers create monopolies, or totally blocking acquisitions and sending declining companies into insolvency. Consolidation has so many scale benefits and its sad to see the expertise and infrastructure go to waste when there are no other buyers.

[@DonnieHQ]

“walking around with a Michael Kors bag makes you look like a wanna be” WSM takes no prisoners 😂

[@Xenon-4300]

Chances are you actually can't walk into a store and buy a Hermes bag. You need to spend tens of thousands of dollars on other items with Hermes before you are considered legitimate enough to be allowed to purchase a Hermes bag.

[@Boredblacksheep]

FTC was correct, however too late. Due to the massive sizes of LVMH and Kerring nobody can compete. And I am not sure they can order them to break up.

[@MiguelBricaBrac]

Well, Lena Khan is on her way out with the current administration so this will help corporate mergers. As for MK, the brand has been subpar for a long time shifting in the late 90’s from top grain leather to embossed leather or laminated canvas in the manufacturer of their handbags. The brand offers deep discounts because the low cost to manufacture the handbags and the inflated initial price assigned to the piece.

[@chadakoin1]

They have decided to merge with Dollar General who will have exclusive access to the new Kors Lite line.

[@jonathanswink2682]

Never thought handbags would be so interesting 😂

[@innoccente1]

There is something inherently wrong with a product that looses prestige because average people can buy it!

[@ForcefighterX2]

the problem lies within the definition of the word "prestige". Prestige does not mean "well known", it means "well known, aspired but rare". Thus it is an obvious implication, that a product which is baught by the masses, may stil be of quality and well known, but is not rare anymore. As a result, it does not match the definition of "prestige" anymore and lost its "prestige status".

[@joez.2794]

"Inherently wrong" how? Or more specifically, in what market? A free market?

[@trod5902]

handbags are stupid yes, but in no way should this merger have been blocked. they are not a monopoly, not by any definition. they have 59% control of one segment of the market, there are so many other brands of handbags out there its insane. this lawsuit is lunacy, I can understand why Wallstreet thought the lawsuit would fail.

[@AmatriceBand]

Lesson : don’t write emails on why you REALLY want to merge.

[@NoUserForOldMen]

I have a conspiracy theory that this lawsuit to block the merger was actually intended to be a satire, making fun of the tactics used by the FTC. Reasonably priced luxury handbags are definitely not a category for anti-trust purposes (they had to so hyper specialize the category that they couldn’t even include bags generically, just handbags in a very specific price range). Someone who reports to Lina Kahn put this in as a joke on the way that the FTC is now trying to subdivide markets to an absurd degree. Nobody got the joke, and now the courts are metaphorically considering whether Irish babies are in fact a delicacy. It’s the only way to make sense of things without becoming disillusioned with the entire federal bureaucracy.

[@Hshjshshjsj72727]

RIP to anyone with MK getting called a “wannabe” at the end

[@robertmariano]

I absolutely disagree that the FTC went after the accessible luxury handbag market. There would be other players that would have filled the void. I wonder when this is appealed in about a year, is the FTC obligated to appear before the court? I ask this question because of the high probability that Lina Khan will no longer be the head of the FTC.

[@PranithShetty-l3c]

Why is LVMH allowed to have a monopoly in True luxury segment ?

[@on-site4094]

Chasing labels 🤡

[@TheRemoteTTL]

think this all was a game. FTC head played big time. how and why? well, if merger is blocked, value of one company will definately go down, so final offer is good to have, but after they can back out, they can buy them later for much smaller amount, by using all market data etc. then, Khan gets profit on it when it will be sold later, and now, when tapestry value goes up. double profit. seems to me. they know what to do, when you control the money, its easy to make it. insider trading is pretty nobrainer. worst is, brands suffer while wall street again, makes profit. it all starts and ends there with profit.

[@frustratedalien666]

This video was excellent, but I gotta confess, from around the 5 minute mark, I found it hard to pay attention, since a recurring thought kept popping up in my head - A FUCKING HANDBAG COSTS MORE THAN $500? WTF

[@CHILEANUNDERCOVER]

EVEN IF the merger would result in a dominant market share (which I don’t believe to be accurate), how does that negatively impact consumers in any significant manner? Products from these brands essentially have no intrinsic value i.e. they have little to no resell value, the leather material used is too heavily processed to last over years, etc. And let’s not forget, they’re all discretionary items. So pricing has always been arbitrary. Who cares if a $230 purse ends up being $250 due to the “monopoly” caused by the merger? A large portion of these brands’ products have been sold with heavy discount or at outlets that it’s become their entire business model. The very reason why people buy their products is bc they can get a perceived deal by snatching a $300 for $170, and the same group will not pay full price for them even if the brands were to consolidate their effort to price gouge. Not offering a big sale (at least not publicly) is a privilege afforded only to a small handful of uber luxury brands like Hermès or some Swiss watch makers. I think the FTC has much bigger and more socially impactful fish to fry imo…

[@matthew.m.stevick]

a new W$M drop. i am having an exceptionally good day. 📈🇺🇸

[@sylar747]

People were worried about a handbag monopoly? Who would that hurt, the women dumb enough to pay $1500 for a bag? Even if they did jack up the price of handbags, women would pay it anyway.

[@andrejmichal4676]

Market saturation, coupled with continuous disappearance of middle classes.

[@lenOwOo]

And what happened after xbox merged with abk. . Literally thousands of people lost job

[@SH-ly1uy]

0:50 why would the regulator be concerned about a monopoly of luxury handbags? Who cares

[@Oilybro]

Great work as always bro.. ❤❤

[@BSJinx]

I think this dispute is what the British mean by "handbags at dawn."

[@zeenkosis]

I hate how guys talk down on handbags but luxury/ vintage cars and watches make “more sense” 😅

[@danny77670000]

I never ever consider MK to be luxury

[@Ad-skip]

2:38 ad skip

[@TheWeldedTube]

My handbag 👜 hasn't been made yet

[@Tomvillan]

"Purchased mostly buy women" - pretty sure I'm the one who is paying though 😂

[@walking_in_the_shade]

If Michael Kors merged with Apple would you then get Apple Kors? 🤔

[@johnnnyutahq]

shouldn't be like luxury brands as Versace would generate huge profit margins? mk more profitable than Versace by orders of magnitude?

[@indianapapi]

As a man, I think expensive bags are among the dumbest things you can spend a lot of money on, but women love to impress other women, so they want the expensive stuff.

[@oakpurple]

Each bag you buy,just buys another big super boat for the shareholders.don’t go broke trying to look rich 😂😂😂😂

[@ddc2343d]

its cray they would stop a merger on ana absolutely stupid non essential item like a handbag. They are already milking their customers, who cares if its a little more. They can afford it.

[@Csilaverte]

Why are you constantly say 'woman' when reffering to 'women', in plural? It's jarring.

[@vincbestia]

6+ min add is something else.

[@baronvonjo1929]

6 minutes in and all I can say is what a stupid industry.

[@LudosErgoSum]

Michael of Kors fell off a cliff. RIP

[@TheAndreasMustola]

I stick to my cargo pants

[@leonardofelippine9781]

I do not think rich people buy these bags. Only people trying to look rich

[@mothra__13]

I love it when people find out about Hermès for the first time. Just think about them as the Rolex of handbags and it starts to make a fraction of sense.

[@iu2]

Is the narration a computer-generated (AI) voice?

[@iu2]

It has to be, no?

[@janstolk486]

How about putting 30 grand in the stock market And you get 3 grand every year for the rest of your life .a My god , how dense are some people !

[@Agent77X]

Handbags on a single woman could be a sign to a romantic interest that she is a high maintenance individual aka gold digger!😂

[@not_a_sp00k]

TIL what handbags are for

[@gordonw4542]

good video on MK who was very short sighted and greedy. He hoodwinked coach and buy public into his scheme over price stock and over reach image. He should know. after all he been in the business many decades image refresh of the brand are catwalk fashion 2 time a years and every year unit you died. Magazine and TV Advertising does not work long term. A collection of fashion each season show work in long run term . Greed and hubris knock common sense out the door everytime. as for Khan at the FTC, she did great job because every greed person hates her.

[@maasicas]

Tapestry is such an ugly name. Coach isnt amazing, but better, for sure.

[@MCorpReview]

Useless and overpriced

[@Reina.Nijinsky]

Subbed 👍🏼

[@kennethramonet5421]

Your inserted ad is ANNOYING af.

[@SixTough]

Why bag 300 smackaroos

[@dylanjimenez1952]

Great ftc decision ❤ break up big business

[@ninakore]

When your gf makes a video topic suggestion

[@anvical2901]

Every other KZbin channel has an annoying intro song you skip after watching 10 of their videos.. WSM is the opposite, like a ritualistic hymm

[@benyameenyitzhak1036]

So our tax dollars are being used to make sure the handbag industry is affordable? Got it.

[@MikeStoneJapan]

lolololol

[@joez.2794]

Using all resources available to the State to combat price gouging on luxury handbags already marked up1000% does more than just protect women - it protects the _free market._

[@benyameenyitzhak1036]

@joez.2794 😂😂😂

[@ploppill34]

bag............................it's a bag🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣

[@langolier9]

❤❤❤❤

[@turbyoulance]

lolol

[@baddudecornpop7328]

Yeah I think Kahn is right here. Also, the gaming industry hasn’t benefitted one iota with MS acquiring activision

[@JJ-zr6fu]

This just means there’s more opportunity for video game companies

[@dylanjimenez1952]

talk about trump organization