“The fact that Kikki.K, a stationery supplier, is now doing bags – everyone's doing accessories!”
So says Scott Sheezel, the director of Melbourne-headquartered accessories business Tilkah. He's right, of course. Gift and stationery business Kikki.K did unveil its first ever leather and canvas bag collection in April this year, with styles including totes, work bags and shoulder bags, as well as wallets. Dubbed 'the Stockholm collection', the name reflects the range's Swedish design influences.
Kikki.K founder and creative director, Kristina Karlsson, appears to not know what all the fuss is about.
“Our Stockholm collection is an exciting but natural extension for Kikki.K,” Karlsson says. “Having identified a need for work bags that can securely, but stylishly, carry your laptop from the office to dinner, the range provides a solution for both professional men and women. I really wanted a bag that was functional but at the same time didn't compromise on style.”
The Stockholm range has retail prices spanning $195 to $450 and the product is made in China. Karlsson says its “too early to say” which styles have had the highest sell through but she will say the move into bags has generated “a lot of buzz” for her business.
“The reaction has been overwhelming to all styles and I truly believe this is because there was a gap in the market for a stylish but functional bag. Professional men and women don't want to compromise on style and yet up until now, there were very few options in the laptop bag market.”
Someone who's been spruiking bags of many a brand name for much longer than Karlsson is Rick Bielecki. The national sales manager at Milleni Leather Goods currently oversees wholesale sales for brands including Pierre Cardin, David Lawrence and Peter Morrissey. A $450 retail price point, like those in the Kikki.K range, does not sit particularly comfortably with him.
“In fashion leather, I still think the $200 to $300 price point has got to be the most advantageous price point for the public. Once it gets to $500, $600, $700, you question it a bit. 'Can I really afford that?' I think $200 to $300 are good price points for presents, a good price point to still be an impulse buy. Once you get above that, you're limited a bit, which is why Morrissey is a smaller market for us,” Bielecki says.
The label he's finding easiest to move in the current market is Pierre Cardin. Milleni took on the label four years ago and Bielecki says there are approximately 1000 stockists in Australia of Pierre Cardin women's leather bags. He puts the label's sales consistency down both to its mid market price points and brand heritage.
“I think being an international brand which has been around since 1950 [helps], and there really hasn't been any bags of that price point. Pierre Cardin Italian leather handbags retail between $200 and $300 and to get an Italian leather bag elsewhere at that price point is impossible. Italian leather bags made in Italy are around $800 to $1000. The cheaper bags where the hides are sourced from India are also around $250 and $300 in the stores. I think people are looking for value for money now.”
The increasing propensity for high street retailers to build mammoth accessory categories of their own – Witchery, for example, is rolling out stand alone accessory stores in Australia and Asia – does not phase Bielecki.
“It is pretty competitive but there's a natural attrition, people do drop out of it. I think most of the majors ones, the long term players, we're all still here,” Bielecki says.
Someone who does concede the impact of the evolving high street a little more readily is Tilkah's Scott Sheezel. His designer wife, Natalie, founded the independent accessories retail business back in 2003 after working for years as an accessories buyer. Today, Natalie and Scott run six retail stores across Victoria and NSW.
Sheezel says it is tougher being in the accessories game in 2011 than it is being in apparel.
“When we started in 2003, you had Mimco, us and Accessorize. There weren't many accessory stores. [High street retailers] had accessory sections but small ones. There weren't big dedicated sections. Now if you go to any retail concept – Sportsgirl, Portmans – they've all got massive sections now.”
Despite acknowledging the increase in competition, Sheezel says he doesn't begrudge it.
“We like that. I think accessories are tough, [especially] to do it well. The more companies that try to do it and maybe don't do it as well as they could because they just want to make a buck out of it, I think makes our brand stronger.”
Since its birth in 2003, the team at Tilkah have tweaked their product mix, abandoning PVC styles and bringing all design in house. Now everything is Tilkah branded and categories include jewellery, wallets and bags.
“We see ourselves sitting now in the premium brands,” Sheezel says.
Though high street brands may be encroaching on Tilkah's market, you wouldn't know it by Tilkah's store numbers. The company has doubled its store count over the last 18 months and Sheezel sees further expansion on the cards, albeit at a slow and steady pace.
“Our aim is probably in five years time to have at least 15 stores,” he says.
When asked what convinces him the Australian market can support more accessories stores, including another nine Tilkah boutiques, Sheezel shows his brand allegiance.
“I don't think the market is ready for more accessory stores, I think they're ready for more Tilkah stores!” he laughs. “People who like our style of accessories, and Mimco's and Oroton's, they will know who we are and if not they'll start to know as we continue to grow. Other ones coming along... it's such a crowded market. It's the hot thing. I think apparel's so tough so all the landlords are getting more and more and more accessory [stores], they think it's the way to go. I don't know if it is. If you go overseas, I can't believe the amount of accessory businesses there are here compared to if you go to London or if you go to the States.”
Kikki.K founder and new player on the accessory scene, Kristina Karlsson, has a rosier outlook. She plans to stick with accessories for the long run.
“We are planning to launch new premium leather bag and accessory collections bi-annually. Although the colour, design detail and shape of the bags will be updated seasonally, the functionality will essentially remain the same. We will be launching a few collection updates pre-Christmas however our next full range is scheduled to launch in February/March 2012.”
Bielecki from Milleni says he's going to continue to think positively.
“There are a few retailers closing but that happens all the time. Fortunately we haven't lost too many this year. Higher rents and low turnover I think has contributed to the closure of quite a few retailers but this is going to happen. We've still got to be positive and I think a lot of our customers, even when times are tough like this, some are doing extremely well.”