• by Sarah Mahoney  @mahoney_sarah, July 2, 2007

Cole Haan is the latest retailer to jump into the luxury sunglasses market, announcing that it would unveil a line of shades priced between $125 and $500. And Tiffany has announced that its first-ever line of sunglasses (in partnership with Luxxotica) will be available early 2008. Coach, of course, already has a well-established line.

"Eyewear is an essential luxury accessory for our consumer," says James Seuss, Cole Haan's CEO. "This category is a natural extension for the brand, with our heritage in footwear and accessories. It allows us to further our image as a lifestyle brand."

But just how many pairs of $500 sunglasses does America need? Plenty. In fact, it turns out that the style mavens who have been christening sunglasses as the new affordable luxury for months now may know more about U.S. shoppers than economists do.

With the ever-increasing price points on fancy handbags, $500 for new shades can seem like a steal. "Sunglasses are just a wonderful way for any luxury or upscale brand to expand into a category that is both low cost and high market," says Milton Pedraza, CEO of the Luxury Institute.

For luxury retailers like Cole Haan, a subsidiary of Nike, it broadens the customer base to the less affluent. "But it's like fragrances. The fact that these items are sold at a lower price point than your other goods doesn't seem to negatively impact sales - it's just an ideal extension category," he says.

"Retailers like them because they don't take up a lot of square footage, and the replacement cycle has increased," says Jim Hurley, a luxury analyst with Telsey Advisory Group in New York. Consumers typically buy new sunglasses every two years now, instead of every four.

Besides, Pedraza adds, there's just something about sunglasses that makes them a perfect splurge item. "It's a very emotional impulse buy - there's an instant cool effect, and you can transform yourself."

Of course, luxury handbags aren't going away any time soon. In fact, Mintel reports that U.S. handbag sales have gained 22% since 2004 and are likely to hit $6.4 billion market this year. "And this high level of market growth shows no signs of abating, with a further 25% rise in sales forecast by 2011," the market research company says.

In fact, purses have practically caught up with shoes: "Only one in three (32%) women spends more on shoes than on purses and bags, down from 37% in 2005," the Mintel report says.

In the total accessories market, NPD reports that in the first quarter of 2007, 32% of the dollar expenditures went to bags and luggage and about 29 % to sunglasses.

But all three items - luxury sunglasses, handbags, and shoes - offer an added incentive to those women who have, like most Americans, packed on a few pounds, says Hurley: "These are all fun and easy status purchases, and you don't have any of the self-esteem issues you might have with trying on clothing."