The risks of dumping the Margaux
Dark Luxury asks leading expert, Sabrina Sadiq, CEO of Luxury Promise, about the potential impact of discontinuing The Row’s best-selling handbag.
Rumours are circulating that The Row will discontinue the popular Margaux handbag, commonly seen on the arms of A-listers such as Jennifer Lawrence and Zoë Kravitz.
The Row, established in 2006 by Mary-Kate and Ashley Olsen, has borrowed from the Hermès playbook to make the Margaux a success. Like the Birkin, The Row’s bags have a classic design, quality materials and, perhaps most importantly, are rarely in stock. This “manufactured scarcity” means the Margaux usually sells for a higher price on secondary markets like eBay and Vestiaire Collective than it does in the shop.
If the Margaux is on the way out, The Row could be about to make a big mistake because the secondary market for the bag could collapse, says Sabrina Sadiq, CEO of London based second-hand reseller Luxury Promise and one of the world’s leading experts in luxury handbags.
Ending a product line and shifting towards a new “it” bag can be a demand killer on the secondary market, she says, which is a problem for brands because customers increasingly consider the secondary market value of bags to justify their purchase.
“If they are going to introduce the next bag then the Margaux is not going to be in demand, because the brand’s focus is going to shift to the next thing,” she told Dark Luxury via Zoom. This could devalue the Margaux and alienate loyal customers who own one. The Row has already opened preorders for a new bag called the Marlo, which is reportedly on its way to selling out.
Although The Row is not generally seen as a trending type of brand, this is behaviour common in more mass market luxury. The risk for luxury brands who focus on this “trending” approach is that if you stop making the old bag and start marketing new models, the demand for older models can rapidly evaporate.
“You have to think about what’s the brand strategy”, Sadiq says. “If that’s the new Margaux, then everyone’s going to want the new Margaux, they’re not going to want the old one”, she says. “You end up devaluing the [original] bag”, and perhaps risk devaluing the brand overall.
Sadiq attributes part of the luxury industry’s troubles in the last 12-18 months with a relentless focus on novelty.
“Luxury has slowed down [in the primary market], because there’s bags that are designed in the shape of a baguette. Or it looks like a lettuce, or a vase, or a packet of crisps, and you’re like, ‘what is this?’”, she says.
Moschino launched a $6,700 handbag shaped like a sprig of celery in November, following its 2020 launch of a bag shaped like a French baguette for nearly $2,000. JW Anderson also launched a $890 pigeon-shaped bag in 2022, which it followed up with a resin Victoria sponge “handbag” last year.
Those novelties are all very well if your key metrics are linked to attracting attention on social media and in the press, but Sadiq says this is simply not what most customers want.
“Our biggest customers are not your Gen-Zs”, she says, who might be attracted to these eye-catching designs.
“Millennials can now afford the nostalgia bags that they couldn’t afford in their twenties”, she says. “They’re either established in their careers or their children are a bit older, and they’re saying, ‘I want to buy the things that I missed out on buying’”, she said.
Those customers really care about the heritage of the brands who make luxury handbags, and this “doesn’t really follow the same trend as what the primary luxury brands are selling”, she says.
Sadiq has personally built a sizable portfolio of classic bags, which she says has only ever increased in value. She’s done this by only buying classic, timeless designs from the “big three” core brands: Hermès, Chanel and Louis Vuitton, and ignoring all the trending designs.
“I just don’t move outside of those core three brands, and I’m very honest to my customers. As a business, we’re taking investors’ money, other people’s money, and we’re putting it into bags. I have to make sure my purchasing decisions are always correct. I cannot be wrong,” she says.
(You can read more about handbags as an asset class in Conrad’s earlier interview with Sadiq in Walpole.)
This week’s news round-up
Bernard Arnault and Donald Trump: A match made in the boardroom
Some great detail and context on Bernard Arnault’s US trade tariff travails here from The Wall Street Journal. Guess who was one of the first people to call Trump after the failed assassination attempt on the US president during the campaign trail last year? Yup, that’s right, it was Bernard Arnault, who knows Trump from the 1980s when both were up and coming property developers in New York. He now hopes that he can leverage their long-standing relationship in order to avoid tariffs on LVMH products entering the US, which is its biggest market – and more than all of Europe combined.
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The risks of dumping the Margaux
Bernard Arnault and Trump
Time on the shopfloor is well spent
Why are so few women creative directors?
Why YNAP exited China
Data scientists and the return of the merchandiser
Secondary market drama over price disparities
Bernard Arnault and Trump