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In battle of the bags, Kate Spade wins — for now

BY CSA STAFF

Luxury handbags seem to be as common these days as smartphones, and therein lies the problem for rival brands Coach, Michael Kors and Kate Spade, who all reported quarterly results this week.

As these three luxury heavyweights battle it out against brand saturation and bored shoppers midway through the year, it seems as though only Kate Spade has all the right moves.

Talking specifically about quarterly same store sales, only Kate Spade saw an increase in its latest financial quarter. The retailer says same store sales rose 10 % in its second quarter ended July 4. Analysts on average had expected an 8.3% rise.

Coach, on the other hand, saw sales at its existing retail stores in North America decline a whopping 19% for the fourth quarter ended June 27. Internationally, sales at existing stores fell 5%. Overall, Coach sales fell 12% to $1 billion.

Michael Kors, which has also struggled in previous quarters, isn't doing much better. The company reported a 9.5% decline in same store sales for the first quarter ended June 27, marking the sixth consecutive quarter of deceleration. In the fourth quarter of 2015, same-store sales dropped 5.8%, marking a spectacular fall from the 26.2% growth reported for the fourth quarter of 2014.

It remains to be seen whether any of these brands can keep the attention of their target markets for much longer, but Kate Spade may have the right strategy.

Kate Spade, unlike Michael Kors and Coach, has avoided over-distributing its products, which has helped it stay largely insulated from a general slowdown in the luxury handbag market.Analysts say Kate Spade has been maintaining tighter inventories and refreshing styles faster, preventing "brand fatigue" among customers.

Coach has been busy acquiring Stuart Weitzman and branching out into creating fashion lines, which may further dilute the clout of its brand.

Michael Kors has remained focused on its brand identity as a "luxury handbag purveyor," but the bags are now pretty much everywhere and many consumers don't want to buy the bag that everyone else has.

While Kate Spade keeps doing all the right things to keep consumers engaged, the battle of the bags rages on.

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FINANCE

Second life for C. Wonder — with a celebrity stylist as pitchman

BY Marianne Wilson

Photo via Getty Images

New York — Specialty lifestyle retailer C. Wonder has new owners and a new strategy — one that will bring it directly into homes nationwide.

On Friday, Xcel Brands completed its $12.5 million acquisition of C. Wonder from Burch Acquisition LLC. Xcel also named appointed celebrity stylist Brad Goreski as creative director of the brand. Goreski, a colorful personality and a panelist on the E! channel’s “Fashion Police” show, will also serve as the on-air personality for the brand on QVC.

Xcel plans to launch the revamped C. Wonder on QVC in spring 2016. Categories will include apparel, accessories, footwear and jewelry; housewares, home decor and gifts are scheduled to launch on QVC at a later date. It will be the fourth Xcel-owned brand to be showcased on the interactive video and ecommerce retailer.

“This highly synergistic acquisition is a significant milestone for Xcel and will enhance our position as a leading brand development and media company,” said Robert W. D'Loren, chairman and CEO, Xcel, which owns the Isaac Mizrahi, Judith Ripka, H by Halston and H Halston brands. “Brad (Goreski) rounds out our fashion celebrity team. This gives us an opportunity to create a very powerful fashion and jewelry media line upon TV and in social media with Isaac Mizrahi, Cameron Silver, Brad Goreski and Judith Ripka."

The Xcel transaction included includes the C. Wonder and C. Wonder Limited trademarks and related designs and other intellectual property rights.”

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L Brands on a roll

BY Dan Berthiaume

Columbus, Ohio – L Brands Inc. continues its winning ways.

The retailer raised its second-quarter per-share earnings outlook as it posted reported better-than-expected same-store sales for July.

L Brands – whose banners include Victoria's Secret and Bath & Body Works – reported net sales of $2.76 billion for the second quarter of fiscal 2015, an increase of 3% compared to $2.67 billion for the same quarter a year earlier. Same-store sales rose 4%.

During July 2015, L Brands' net sales totaled $759.5 million, up 3% from $735.3 million the same month the prior year. Same-store sales increased 3%.

In addition, L Brands increased its second quarter earnings guidance of $0.66 to $0.68 per share from its previous guidance of $0.60 to $0.65 per share.

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