As any regular reader of this blog knows we feature a handbag every day. After all, if there is any symbol of the rise of the luxury market aimed at the masses it is the "it bag" the bag that is released and suddenly dangled off every celebrity's arm. Everyone must have it for a season or so and then, just as quickly, everyone quickly consigns it or relegates it to the back of the closet. The Fendi baguette, the Vuitton Multicolore Speedy, the Chloe Paddington and so many others have been loved and then discarded. But could all this buying be slowing down. The NY Times' Eric Wilson took on the question of whether the status bag is on the way down.

There's no question that tthe mid-range luxury consumer that fueled the bag frenzy of the past few years, is cutting back. While once a trendy bag was the way to show the world you had made it (and much cheaper than the status car or the status home), now in troubled economic times it seems like an easy place to trim the fat. Especially since, as designers churned out more and more special and limited editions it has become impossible to keep up with the latest trends.

If I had to choose a "jump the shark" moment for the handbag craze it would have to be the release of the Louis Vuitton Patchwork Tribute bag, the $45,000+ haphazard creation shown at right which was last spring. I might also speculate that more and more consumers are becoming aware that their bags are less likely to be coming from a French atelier and more often are being churned out in a Chinese factory.

Handbags are clearly not going away. And for the true fashionista there will always be a market for a beautifully done bag. As in other markets, a loss in status or interest usually pushes the dilettantes out, leaving the dedicated obsessives behind.

Although the super-rich are still spending money like they always do, they aren't the only ones who support the luxury market and signs seem to say that some other groups, namely the next level down, are getting a little tight-fisted with the cash. Many high-end retailers are reporting disappointing sales and drops in demand by as much as 20%, and the usually highly anticipated Christmas shopping season is looking "cloudy at best."

So far the most affected consumers seem to be households earning $50,000-$150,000, with spending suffering less as household income increases. However, experts warn that if this trend continues even the richest spenders may begin to curtail some of their habits.

Could the high-end handbag and shoe trend be waning? There are some warning signs that the luxury frenzy is abating. A Fortune article brings together a couple of important stats such as the fact that both Nordstrom, the high-end department store, and Coach, purveyors of mid-range handbags, have issued warnings of weaker-than-expected sales. The sector of the luxury market that will most likely be hit won't be the very high end but the "masstige" (prestige items for the masses) market, those retailers who have aimed squarely at the moderately wealthy. This has bread and butter for Coach over the last few years, leading to explosive growth. Now their stock is off 32 percent in the past six months. The article cites the falling estate prices as one of the possible reasons for the slowdown. As people's houses are worth less they feel less rich and so they are less likely to spend heavily. Many retailers are anxiously awaiting the upcoming holiday season to see just how soft the luxury market is.

Martha Stewart seems to be gradually repositioning herself toward the masstige market. Sure, she's still got the Kmart deal but now it has been announced that she will be designing upscale merchandise for the Macy's and Bloomingdale's chains. The Martha Stewart Collection will be in stores across the country starting in the fall of 2007 and like her Kmart line it will include home items like bed sheets, dishes, cookware, holiday decorations and garden furniture. The new line isn't a direct competitor for the Kmart line because it will be more expensive and aimed at a more affluent audience. Perfect for outfitting her new line of homes.