How accessories have saved fashion industry

Designer handbags and the other frills and fripperies that go with a girl's posh frock are being hailed as the saviours of the ailing fashion industry.

Clothes may have been struggling to make money for high street traders who are forced by stiff competition to savagely discount their prices - but accessories have been joyously bucking the gloomy trend.

Sales of hats, bags, belts and other accessories rose by 10 per cent last year - five times the rate of the rest of the fashion business, according to new research.

Market analyst Verdict says handbags - and in particular designer handbags - have been the star performer. While women may once have had just one or two handbags, many now aspire to own four or five, they say.

Bags by the likes of fashion houses Chloe, Mulberry and Balenciaga have been particularly fashionable in the past year, prompting shoppers to opt for bright colours and capacious styles. "When you buy a beautiful bag, you feel you're making an investment in something that will always look good and that you'll have for ever," remarked Anna Garner, Selfridges' head of fashion. "Customers look at accessories in a different way from the rest of fashion."

According to Verdict's new research, published today, British men and woman now spend £2.1bn a year on accessories to match their wardrobe. Half of the spending goes on clothing such as hats, scarves and gloves and one fifth on jewellery and watches.

About £700m a year - 32 per cent of the total - is lavished on handbags, wallets and their less glamourous cousin, luggage.

The boom comes amid signs that shoppers are increasingly avoiding boutiques to buy fashion garments at budget chains such as New Look.

However, while women may baulk at paying hundreds of pounds for a designer outfit they may only wear a few times, they appear only too happy to hundreds of pounds for a handbag they can use every day.

"In clothing, people are questioning the price of designer outfits and there is a democratisation of fashion," said Maureen Hinton, retail analyst at Verdict. "People are quite happy to buy at Primark or Asda but designer bags are a must-have and people want the real thing and not the high street version."

She added: "Handbags really are the latest thing. If you spend £400 or £500, you can get a lot of wear from that bag. It doesn't matter what size you are - and you can wear it with any outfit."

Internet auction sites such as eBay are abuzz with bids for second-hand designer handbags, which retail online for a fraction of their shop price.

Celebrities, such as Scarlett Johansson, who was photographed with a Mulberry Roxanne bag on the set of a Woody Allen movie, have helped popularise individual bags.

Along with bags, sales of belts and jewellery have been strong. Ms Hinton explained: "If you are going through a consumer downturn it is quite easy to say: 'I don't want to spend that much on an outfit' and it is quite cheap to get some earrings or a belt that will liven up an outfit.

"There has been an increase in sales of fashion jewellery for men. It started with bling but has become more subtle."

The Arcadia entrepreneur Philip Green has launched a new accessories chain, Muse, and Selfridges is expanding the space devoted to the sector.

Who sells what?

* Retailers are beginning to appreciate that selling accessories is a lucrative business. Marks & Spencer and Next are the biggest players in the £2bn-a-year market. But there are specialist stores, such as Claire's Accessories, the third biggest player. The fourth largest is Accessorize, owned by Monsoon, which has a more upmarket offering. Arcadia, the store chain owning TopShop, Dorothy Perkins and Etam, has five per cent of the market. Arcadia has also launched an accessories chain, Muse. New Look, Debenhams and Primark share 13 per cent of sales. George at Asda, the clothing label of Britain's second biggest supermarket chain, has three per cent of sales - worth £60m.