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Who would have thought that you could actually, sensibly invest in handbags, of all things! I’m not talking about any old bag that you might pick up at TK Max or Primark, but serious, high, high end designer handbags that are worn as mega status-symbols.
In 2019 designer handbags were named by Knight Frank as the number one collectible investment, beating art, stamps and rare whisky. But the handbags they tracked came from a small pool of top brands; in particular Hermes, Channel, Louis Vuitton and Gucci. With the Hermes Birkin outstripping all rivals by far. In fact, in 2019 alone ‘The Birkin’ increased in value by 13%.
So, while gold and Bitcoin are good hedges against inflation, currently, if you want an alternative investment that will grow over the next few years, handbags should be your focus. Even in lockdown, Christie’s latest designer handbag sale sold out, raising £1.34 million.
Cleverly, Hermes makes it extremely difficult to buy one of their bags new. Customers have to wait months and even years to get an appointment to buy one from a store and even then they can’t be sure which bags will be available for them to buy. It’s an extreme level of exclusivity which, of course, makes everyone desperate to own one. Hermes also increase the price of their bags each year, which keeps their secondary market (second hand sales) value high.
The most sought-after styles are the Kelly and the Birkin, particularly the Birkin which has achieved staggering prices at auction. In fact the most expensive handbag ever sold was a white Himalaya crocodile diamond Birkin, which sold at Christie’s in 2017 for $379,261 (£277,188). In fact, the ten most expensive Hermès handbags ever auctioned have all been crocodile-skin Birkins.
Both the Kelly and Birkin see annual value increases of around 12 – 14%. The Birkin has seen a value increase of over 500% in the last 35 years and it’s widely assumed that the value of these bags could double in the next ten years. Nothing is certain, of course, so don’t buy one assuming that this will be the case, but past performance is a decent indicator of future possibilities.
With Birkins you’re pretty sure of a winner if the condition is good enough. The ‘Holy Grail’ of Brikins is the highly sought-after black Birkin with gold hardware. If you get your hands on one of those at a reasonable price, you really are doing well.
However, while you’re looking around on auction and ‘vintage’ websites, aim to spend around £4,000 on a decent Birkin (ideally one that you have been able to check for its condition) in order to expect a good profit later on.
The Kelly bag also increases in resale value on the whole, and is generally a little more affordable to new collectors if bought at auction or on a vintage site. In the last ten years it has gone up by an impressive 129%. How many other investments achieved those figures recently? You can expect to pay a couple of thousand pounds for a good Kelly bag that can be stored to sell at a profit later on.
If you’re a first-time investor, Chanel is a popular and reliable option for a starting out fashion investment. The Chanel Flap Bag 2.55 design is a good one to start with, as it is a timeless design that ensures you’ll be able to find plenty of interested buyers when you decide to sell on. Chanel flap bags have risen by 132% over the last ten years.
First launched in February 1955, with a retail price of around £154, it grew in value to £810 in the nineties and now will set you back over £4,000, having increased by 70% in the last few years alone. According to the website Open for Vintage, the retail value of these bags regularly increases by around 3% every year. It also holds its price at resale, so can be a good investment if its leather and hardware are in good condition.
Another bag to consider for investment is the Chanel Boy Bag. It was only introduced in 2011 but is very popular already and could run and run. It has already doubled in price and tends to at least hold its value at resale.
The Louis Vuitton Neverfull remains popular due to periodic price increases and high demand. It is one of Louis Vuitton’s all-time most successful bags. It comes in endless options of materials as well as limited editions and special artist collaborations. With these, it’s best to go for one of its rare limited-edition versions. These tend to resell at at least twice the original price.
Gucci is a great name to invest in across the board. Their handbags are certainly worth considering as a long-term bet.
The main styles to consider for their resale value would be the Bamboo Bag, the Queen Margaret, the GG Marmont and the Jackie Bag (named after Jackie Kennedy).
Buying a designer piece new is rather like buying a new car. It will lose value as soon as you take it out of the shop. However, with really good pieces – like the Hermes bags – they could regain their original value within two or three years. Then, they steadily climb.
On the whole though, if you want to make money from your items you are best off buying second hand – even slightly damaged – and then improving it and keeping it in good condition until you sell for a profit. James Harford-Tyrer of Cudoni says “If you buy new from a shop it will be difficult to make a profit unless the thing is through-the-roof popular or is limited edition. On the secondary market it could all be worth a lot later on. The purchase price ultimately dictates what will make money.”
James Harford-Tyrer says that condition is of the greatest importance. “If you have something in good condition, the potential for resale is there,” he says “The minute there is damage – stains, buttons missing etc – it will immediately tank. However, if you improve something that is not in a great state then you could reap the rewards later on.”
What are your thoughts on investing in designer handbags? Perhaps you already own one yourself, or want to start a collection as an investment. Let us know your views on designer handbags as an alternative investment!