I saw this bag at The Little Shop in Haddonfield, NJ, last month. They couldn't find the pattern - it was one of their own - so the owner described how to make it.
1. Make 2 bags. One is the exterior and one is the lining. For each, cut 2 rectangles or squares. I cut mine 14" x 14" but next time I will make it deeper. Line all 4 pieces with fusible fleece. This makes the bag soft and squishy which I like. Sew right sides together on 3 sides and press seams open.
2. Square off bottoms.
3. Put the lining inside the exterior bag, wrong sides together. Match up top edges and side seams and pin.
4. Bind top edge.
5. Make handles. There are different ways to do this but I covered 1" canvas webbing with fabric. My handles were 30" long.
6. Machine stitch handles on inside about 4" down from top. Fold over the top of the bag to form a cuff. Open up the cuff to fit in more stuff, as needed!