Written by ERIN CUNNINGHAM

We're calling it now: The "Leonardo DiCaprio effect" is officially a thing.

On the heels of the 41-year-old actor's first Academy Award win, one item has gone viral and sold out completely — and we're not talking about Trefoils Girl Scout cookies. 

In September, Vetements (a Kanye West favorite), known for its sartorial rule-breaking, showed a variation of its now-insanely-popular, super-long-sleeved sweatshirt with an image of young Leo and Kate from Titanic screen-printed on it. At the time, a nod to the '97 blockbuster may have seemed random. But, now that DiCaprio is making headlines (and rightfully so), the terry cloth hoodie seems like it hit shelves at just the right time.​

​In April, Elle writer Justine Harman spotted a classic, nylon box-shaped Kate Spade bag on eBay.

The bag, she noted, was knocked down from its original price of $250 to a staggeringly low $39.99. (That particular discounted bag has now been sold, but remaining "vintage" Kate Spade items are still marked down pretty low.)
While this discovery delighted some millennial women who grew up begging their parents for one of these handbags, others might have noticed that this dramatic price dip is indicative of something bigger: The designer handbag industry is losing its luster.
As with all trends, there's an ebb and flow. Not everything can stay relevant forever. Kate Spade has adjusted to a more colorful, bright, fun look, but the company's offshoots, Kate Spade Saturday, targeted towards millennials, and Jack Spade, which tapped into the men's industry, shuttered all their doors in the winter, The Wall Street Journal reported.

​In April, Bloomberg noted that Michael Kors was the top handbag for teens, replacing Coach. Kate Spade was in third place.

But Michael Kors' sales growth has been eroding, and prospects do not look good for the brand.
The brand's inventory has risen, suggesting that the brand's products aren't flying off shelves.
FacebookMichael Kors rose to popularity because of its handbags.

But it might not just be handbags that are at a loss. This pattern is indicative of a much larger trend.
After all, millennials spend their money differently than the generations preceding them did. Old-school retailers like Gap have suffered compared to fast-fashion companies like Zara and H&M, which allure millennials with their quick turnaround and low-price. Traditional retail has been struggling as a result.
And those traditional retailers who attempt to cater to millennials instead of baby boomers or Gen Xers face huge possible risks: Millennials don't spend that much money as it is. Saddled with debt, this generation isn't spending money on luxury items. And by alienating consumers who do have money, retailers inadvertently put themselves in a precarious situation. Who will buy from them?

Hilary Stout illustrated this problem in The New York Times in June: "After all, the millennial generation has less wealth and more debt than other generations did at the same age, thanks to student loans and the lingering effects of the deep recession," she wrote.

And Forrester researchers highlighted in a study that baby boomers, between the ages of 51 and 69, are the "biggest spenders" because they have extra cash from decades of saving and investing — something millennials just can't afford.

Additionally, millennials are flat out not spending on apparel. A study by Morgan Stanley highlighted that millennials are instead choosing to spend money on expenses like rent, cellphones, and services.

A Michael Kors store in Almaty, Kazakhstan. (Andrey Rudakov/Bloomberg) 


​By Sarah Halzack 

A Michael Kors store in Almaty, Kazakhstan. (Andrey Rudakov/Bloomberg)If it seems like you see a Michael Kors purse on every shoulder when you walk down the street or hit the mall, there’s something to your observation: The brand had a years-long hot streak after going public in 2011 when its jet-set-inspired handbags and accessories became a must-have for aspirational luxury shoppers.
But in the last year, investors and fashion insiders have begun to wonder if the brand was shooting itself in the foot by muscling into so many malls and by selling its bags for promotional prices that made them more accessible to the masses. Sales growth slowed dramatically, suggesting that as the brand became more ubiquitous, it was starting to lose some of the exclusive vibe that made it a hit in the first place.
On Tuesday, Kors delivered an earnings report that sent a message to its doubters: There is, it seems, a path forward for the brand to thrive and recalibrate in the face of these perceptions.
Kors said that comparable sales — a measure of sales at its stores open more than a year — were down 0.9 percent in most recent quarter. While that figure still pales in comparison to the blockbuster growth it posted two or three years ago, it is a clear improvement over what was seen in the previous three quarters. And the brand managed to notch improvement during a holiday season that was a tough one overall for the retail industry.
Digging into the report more deeply offers some other reasons for optimism about the brand’s future. For one, the company said its average unit retail price was pressured this quarter, but it was pressured for the right reasons. On a conference call with investors, chief executive John D. Idol said the decline was not driven by having to resort to deep discounts to unload slow-selling merchandise, a tactic the brand has had to employ in the past. Instead, he said it was because shoppers are embracing the trend toward small-sized purses, crossbody bags and small wallets — pieces which logically come with a lower price tag than, say, a tote bag.

So, overall, the company saw a strong increase in the number of items it sold in its core handbag business. That sends a message that Kors is figuring out how to score with something other than the $300 mid-sized handbags that have been its bread-and-butter (and which have also been crucial for rivals such as Coach and Kate Spade.)
Kors has earlier stated that it is pulling back on its wholesale business of selling pieces in department stores in an effort to fight the perception that the brand is too omnipresent and thus lacks cachet. The improved results in its own retail outlets this quarter are, in a way, a validation of that strategic tack. While Kors has previously leaned heavily on department store sales — by one estimate, almost half of its sales come from such outlets — the momentum at its own stores and website offers hope that there is a viable iteration of this business that leans more heavily on direct-to-consumer selling.
Investors sent Kors’s stock up a whopping 25 percent today, a sign that they were pleasantly surprised by the brand’s report. The company said revenue was up 6.3 percent to $1.4 billion in the quarter, and profit was $294 million, lower than the same quarter last year.
The results come just days after a key rival, Coach, reported somewhat improved sales amid an ongoing struggle to polish the image of its overexposed brand.  Taken together, the results at Kors and Coach suggest that these accessible luxury titans may be getting closer to putting their brands in the sweet spot between being overexposed and underutilized.


Sarah Halzack is The Washington Post's national retail reporter. She has previously covered the local job market and the business of talent and hiring. She has also served as a Web producer for business and economic news.