A new Jefferies report focuses on a specific retail segment that has been under a lot of pressure in recent years: handbags. Jefferies analyst Randal Konik believes that the results from a new handbag survey indicate that the worst of the downturn in the handbag market could now be in the rear-view mirror.

Interesting Correlation

Konik notes that Jefferies has identified a strong negative correlation (correlation coefficient -0.71) between handbag sales growth and footwear sales growth. While footwear has been on fire in recent years, handbag sales have slipped. Konik believes that the wave of new handback styles will shift the balance of discretionary spending back in favor of the handbag industry once the new styles begin to gain traction.

Underappreciated Turnaround

According to Konik, the stock market is…

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