Trace or copy pattern; set aside. Felt wool fabric by washing in hot water and drying fabric in a hot dryer. Press. Cut two purse pieces from felted wool. Sew Velcro strips to rounded edge of lining piece and the other Velcro strip to the short straight end of the outside piece of wool.
With right sides together, stitch across bottom straight edge of purse, using a 1/4-inch seam. Mark placement of holly on outside rounded edge of purse. Using two strands of green floss, sew stem outline stitch around leaves and center lines of leaves. Using one strand of green metallic floss, stitch another stem outline stitch close to center leaf line. Using red metallic embroidery thread, sew tiny red buttons at center of leaves.
With right sides together, measure up 6-1/2 inches from bottom straight edge of purse, and mark with pins at both side edges. Using a 1/4-inch seam, sew from pin around the top curve to the other pin at the side edge. Remove pins. Turn right side out and press edges flat. Sew red trim around top curved edge, tacking on by hand with matching sewing thread. Using one strand red metallic embroidery floss, make decorative lazy daisy stitches around curved edge onto wool. With right sides together, fold bottom straight edge up about 3 inches and sew side seams in 1/4-inch seams. Turn right side out and press side seams flat. Measure 7-1/2 inches of trim for handle and attach at back side edges just under the folded flap.