The Warehouse is taking a shot across TK Maxx's bow by offering "achievable luxury" handbags online, a retail expert says.
The move also reflects Kiwis' growing taste for finer things as New Zealand's largest retailer expands its designer offerings through its Red Rack channel.
This month, The Warehouse launched a range of Kate Spade, Coach and Michael Kors handbags exclusively online.
Prices range from $139 for a Coach wallet to $329 for a Coach handbag.
General manager of apparel at The Warehouse, Ben Sullivan, said they were trialling the handbags in the run-up to Christmas.
This came after noticing Kiwis spending a "significant amount" on mid-range brands at overseas-based online retailers.
The Red Rack sells discount brand imports such as Fenty by Rihanna, Calvin Klein and Nike and was launched last year as one of The Warehouse's innovations to adapt to the rapidly changing retail landscape.
"As we are working to expand our Red Rack offering, we are looking at opportunities to have a larger range of brands and products available both in stores and online for our customers to shop," Sullivan said.
Managing director of First Retail Group, Chris Wilkinson, said the handbags are an interesting and tactical play to put off TK Maxx's likely expansion into New Zealand.
The American off-price retailer, which has been hugely successful in the UK, specialises in selling branded and remaindered products, such as clothing, shoes, homeware and toys, at heavily discounted prices.
With hundreds of stores in the US and UK, it's currently focused on expansion Downunder, with its first Australian store opening in 2017.
Wilkinson said the Red Rack's new range of "achievable luxury" handbags was a shot across TK Maxx's bow.
"The Warehouse has recognised TK Maxx will eventually enter this market and they've been taking this strategic response over the last 12 months as it grows Red Rack."
Kiwis who travel to Australia and the States and saw the availability of these brands there are increasingly expecting to be able to buy them here as well, he said.
The retail expert said the fact the handbags were only available online was also well-played as it means shoppers who wanted higher-end products wouldn't to go into the stores.