The Observer Magazine (23/07/2006 page 30) in the UK has printed an article on how as the demand for luxury handbags has increased (146% in the last 5 years), so has the price. Apparently British women spend £350m a year on handbags and own an average of five bags.

“These days, bags are no longer something to keep your keys in, they’re a friend and a plaything.”

The profit margin on handbags in enormous, with a lot of bags being made for very low cost in China and then sold with a huge mark-up, often in excess of 1,000GBP. It is an attractive market for designers as they are easier to produce than clothes or shoes as one size fits all.

The Observer article also includes a “smart guide to five must-have it-bags”:

Hermes Birkin
Originally made for Jane Birkin by Hermes president Jean-Louis Dumas to replace the actress’s rather shabby straw shopper, this spacious bag is essentially a hold-all - but a hand-stitched holdall, so it will set you back at least £2,250. Big price for a big bag.

Louis Vitton Monogram
The grand dame of it-bags. The LV monogram design was born in 1896, when its fiddly pattern was created to impede counterfeiters. Not that successful, then, considering Vuitton is now the most counterfeited brand in fashion history.

Prada Bowling Bag
Miuccia Prada’s most enduring contribution to bag history may be the black nylon ‘Pocone’ backpacks from the Eighties, but every fashion follower knows that the outsized, ostrich-skin bowling bag that graced every starlet’s arm in 1999/2000 was one of the first stirrings of the modern it-bag era.

Fendi Baguette
Created in 1997, this simple sac with a short shoulder strap was designed to be carried under the arm - like the French stick that gave it its name.
Its simplicity didn’t stop it becoming a fashion icon: over 600 versions of the basic bag exist. Buy it in fur, crocodile, denim, ponyskin, python…

Balenciaga Lariat
Inspired by motorcycle bags, this compact bag has gained a cult following since it first appeared in 1998. When first launched it stuck to the shelves, until sent to 30 of fashion’s most influential names. And once Kate Moss had been snapped with her Lariat, it became a huge hit.

Source: http://observer.guardian.co.uk/magazine/story/0,,1824169,00.html

Related articles other people have read:
£750 Handbag Helps Increase Sales
Would you carry a manbag?
Model Moss boosts £2.99 bag sales

Subscribe to this feed