Why Handbags Are the New Star at Kurt Geiger

British brand Kurt Geiger has long been the London cool girl’s go-to for trend-driven footwear. It has cornered the market in affordable luxury with its quality offering and sharp pricing.

But now, the 50 year-old label has its eyes on a bigger prize.

Just like fall ’19 campaign star Ella Balinska, the British actor (and former Kurt Geiger shop assistant) set for Hollywood fame with her role in the upcoming “Charlie’s Angels” movie, the brand is revving up its stateside business with U.S. partner Nordstrom. Having gone from zero to 75 doors in the space of just 18 months, it’s one of the key launch brands represented at Nordstrom’s recently opened New York flagship.

Charlie's Angels actor Ella Balinska stars in the Kurt Geiger fall '19 campaign.
Charlie’s Angels actor Ella Balinska stars in the Kurt Geiger fall ’19 campaign.
CREDIT: Kurt Geiger

Surprisingly, however, it is Geiger’s newest category, the handbag, that is driving its U.S. business. While the sale of bags represents 18% of its U.K. domestic revenues, this rises to 50% within its international business, which is doubling year-on-year.

This is likely because the brand entered the U.S. market at a similar time to launching bags, so the U.S. consumer has associated Kurt Geiger with bags from the outset, said CEO Neil Clifford.

“The cut-through we’ve made in bags in the U.S. is much more significant that in our domestic business because that was already so established while our international business is only 5 to 6 years old and we’ve been growing very fast,” he explained, adding that margins on bags are also higher as they are free from sizing constraints.

Kurt Geiger's Crystal Rainbow Kensington launches today with a proportion of sales donated to Children's Charity The Rainbow Trust.
Kurt Geiger’s Crystal Rainbow Kensington launches today with a portion of sales donated to children’s charity The Rainbow Trust.
CREDIT: Kurt Geiger

With a creative team headed up by Loewe and Inditex alum Jose Luis Rhodes, they are quirky without being over designed and look rather more expensive than the max ticket price of $250 might suggest.

Kurt Geiger approached the design process from a consumer perspective.

“We couldn’t find what we wanted in the contemporary handbag market and what there was felt very boring,” said Rebecca Farrar-Hockley, creative director, “so we started by creating what we wanted for ourselves — product that represented real value for money with fabulous color combinations and fun adornments to make you smile and give your look real Instagram appeal.”

mytheresa's Tiffany Hsu with the Kurt Geiger Shoreditch bag.
Mytheresa’s Tiffany Hsu with the Kurt Geiger Shoreditch bag.
CREDIT: Kurt Geiger

The Instagram traction from influencers including Mytheresa’s Tiffany Hsu, Linda Tol and Nina Suess and 1,000-strong waitlists for the hero Shoreditch and rainbow Kensington certainly echo her words.

Another reason for the bags’ resonance, she said, is that the the branding is unexpected. Instead of some permutation of the words Kurt and Geiger, they opted simply for a clasp in the shape of an eagle, inspired by a ring belonging to a member of the team.

“We tried out both that and some more traditional branding and the customer told us very quickly that she preferred this more innovative branding mechanism,” Farrar Hockley revealed.

Marina_Diamandis stars in Kurt Geiger's campaign for the new Rainbow Kensington.
Marina Diamandis stars in Kurt Geiger’s fall ’19 holiday campaign carrying an oversize version of the Rainbow Kensington bag.
CREDIT: Kurt Geiger

Here, Clifford and Farrar Hockley expand on their U.S. strategy, the success of their handbags, new launches and what lies ahead for the the brand in the global marketplace.

How important are handbags for the company as a whole?
“It’s very important. The the size of the global handbag market is bigger than that of the shoe business. We sell over a million handbags and 4 million pairs of shoes a year, which is a very significant part of our business when you put it in perspective. We only launched bags in the last 4 years. Our handbag business could definitely be as big as our shoe business.”

What is Kurt Geiger’s biggest challenge in the U.S. market?
NC: “The bags are selling because of what they are in terms of design and price point. There is nothing that compares to a KG bag at $250. However, this design/value relationship is ahead of where we are in terms of brand awareness — particularly in the U.S. and international market.”

Why do you think this is?
RFH: “Even with the best wholesale partners in the world, it’s very hard within a multi-brand environment to completely demonstrate your real brand energy to the customer.”

How will you go about addressing this?
NC: “Internationally, we realize that we have to invest in building our brand and part of that will be opening strategic KG stores in key markets in the U.S. The big project we are analyzing now is how we bring our Kurt Geiger store format to the United States. We think our first U.S. doors will open early 2021.”                                                                                                                                                                                                                                                  RFH: “The success we’ve experienced with our U.S. wholesale partners, particularly in the handbag category, gives us the confidence that we are well-placed to consider more seriously a store opening program.”

Where is the sweet spot in terms of price?
“There’s a pretty narrow range when it comes to bags as they range from $99 to $250, but the $150 medium shoulder bag is our bestseller.”

Where are the bags produced and is there the same production strategy as for the shoes?
NC: “They are produced in China while the shoes are made in numerous countries including Spain, Italy, Brazil, China and Portugal.”
RFH: “The strategy is similar in that we don’t work with synthetic leather which also makes us better value for money.”

Do you have further U.S. wholesale expansion planned.
NC: “We are launching our Carvela brand across the shoe category with Dillards in December and will move into handbags next year there, too. We are already with Zappos and Bloomingdale’s, but consider Dillards and Nordstrom as our key anchors in the U.S. for 2020.”

Where is your main geographical focus for 2020?
NC: “While we’re not entirely focused on the U.S., if you asked what single market would see our biggest growth in 2020, that would be the United States.”

What other territories are you targeting?
NC: “We have also really great exposure in European department stores now, whether it’s La Rinascente, El Corte Inglese and Zalando online. We are making great strides in Australia with David Jones and Maya, and have a very strong business in the Middle East with our franchise partner and KG stores. We have also just signed a new partnership in India, where we will open three stores next year, two in Mumbai and one in Delhi.”

What’s the forecast with your domestic U.K. market?
NC: “We are one of the few U.K. based brands still growing its domestic store portfolio. We have opened six to seven new stores this year and 10 to 12 are planned for 2020.”

You are also diversifying into other accessory categories?
RFH: “We have just launched a new collection of small leather goods like credit card holders, iPhone cases and coffee cups in the Rainbow Kensington range. Functionality is key ,so everything is driven by the requirements of the Kurt Geiger woman.”

The Kurt Geiger Rainbow Kensington holiday campaign, featuring Marina Diamandis, launches today. It also includes a special crystal version of the hero Rainbow Kensington bag, where a proportion of the sales will be donated to The Rainbow Trust, a children’s charity that supports families with terminally ill children.

Kurt Geiger's Shoreditch bag.
Kurt Geiger’s Shoreditch bag.
CREDIT: Kurt Geiger
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