Business

Kate Spade the latest handbag slinger to see its stock slide

Wall Street has been dipping into handbags lately — and getting its fingers caught.

Kate Spade’s investors are the latest casualty in a brutal month for handbags, with the company’s stock beaten down more than 25 percent Tuesday on a disappointing outlook.

A crowded landscape for leather accessories is forcing painful markdowns as once high-flying brands grope for a sliver of shoppers’ fleeting attention spans, analysts say.

Just last week, shares of red-hot rival Michael Kors tumbled nearly 8 percent after the company admitted it was forced to clear out goods ahead of the crucial fall season.

And Coach, which lately has been knocked from its once-dominant perch by Kors and Kate Spade, reported sharply lower quarterly profits on Aug. 5, blaming rising costs and tumbling sales.

The ride for Kate Spade investors was especially bumpy Tuesday.

In premarket trading, Kate Spade shares had surged nearly 10 percent, to a 52-week high, as the company reported sales increases of more than 50 percent at home and abroad.

But by late morning, the stock had swung deeply into the red, as execs warned on a conference call that the company may not meet earlier targets on margins as price competition has pressured it into discounting.

The stock plunge, which left shares at $29 at the close, was the worst since 2009 for Kate Spade, erasing all of its gains for the year.

“We’re not going to sit on the sidelines while there’s meaningful promotional activity amongst retailers and competitors,” said George Carrara, Kate Spade’s operating chief.

Kate Spade previously traded under the corporate parent Fifth & Pacific, a successor to Liz Claiborne that had also owned such brands as Juicy Couture and Lucky Brand, which have since been sold off.

On Tuesday afternoon, Nordstrom’s Web site was offering a Kate Spade New York “Holly Street – Francis” leather and fabric tote at $233.16 — a third off the regular price of $348. Kate Spade-branded pumps and boots were going for as much as 50 percent off.

That’s not to say that handbags aren’t still a booming business. The recent stock wipeouts are more a reflection of Wall Street’s overinflated expectations, according to Mary Ross Gilbert, an analyst at Imperial Capital.

“Is this happening because there’s a handbag apocalypse? The answer is no,” Gilbert told The Post.

In the case of Kate Spade, Wall Street was shocked when the company backed off its margin target for 2016, saying it may take until 2017 to meet them.

“Investors were not just of the mind-set they were going to meet those numbers — they were thinking they were going to beat those numbers,” Gilbert said.

The biggest problem for Kate Spade lately has been with its newer “Saturday” line that’s aimed at teen shoppers, the analyst noted. On the lower-priced line’s Saturday.com site Tuesday afternoon, a slew of dresses, bags and shoes were going for 50 percent off.