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How to invest in luxury handbags

by jcp
gawdo

When we think of luxury handbags, images of beautifully crafted, designer goods come to mind, worn as status symbols by the rich and famous. Glossy patent leather, gleaming metal logos and that gorgeous new bag smell, all factors buyers want from their pricey purchases.

But what if you could sensibly invest in such handbags? Not the one you bought from TK Maxx last week, or the Primark tote that’s been stuffed in the bottom of your wardrobe for three years. We are talking seriously sought-after high-end bags.

In 2019, Knight Frank named handbags as the top collectible investment. They topped the list to beat stamps, watches and even art! The handbags they tracked came from a handful of designer brands; specifically Hermès, Chanel, Louis Vuitton and Gucci. The famous Birkin bag from Hermès outstripped all rivals without effort. In fact, ‘The Birkin’ increased in value by 13% in 2019 alone.

If you want an alternative investment to gold or bitcoin, handbags should be your focus. Even through recent lockdowns, Christie’s latest designer handbag sale sold out, making a whopping £1.34 million.

Handbags that will make you money

Hermès

Hermès make it difficult to buy one of their bags new. Customers often have to wait months, sometimes even years to get an appointment at a Hermès store. Even then, when clients do get an appointment, no one can be sure which bags will be available to them for purchase. This is a clever technique from Hermès, as this creates a powerful sense of exclusivity, which makes buying a bag from them a feat people become desperate to achieve.

Not only does the exclusivity of these bags make them a good investment, but second-hand sales of Hermès bags remain high in value, as Hermès increase the price of their bags annually.

In terms of which bags are most sought after, the Kelly and the Birkin are the top styles from Hermès. The Birkin in particular is world renowned, with a white Himalaya crocodile diamond Birkin selling for a staggering $379,261 (£277,188) at auction in 2017. This sale made it the most expensive handbag ever sold.

The Birkin was named after English actress Jane Birkin in the 1980s. The cost varies greatly depending on different material used when creating the bag. For example, the type of leather used, whether exotic animal skins (such as crocodile) are used, and whether expensive stones, diamonds and precious metals are incorporated on the bag.

It’s never known for certain when a Birkin will be available in a Hermès store, however there is certainly a rush for buyers to get their hands on them. For most people, an auction or second-hand seller is the best way to get your hands on one.

The Kelly was named after classic American actress Grace Kelly. She bought the bag into the limelight in 1954, whilst the bag was still known as ‘sac a depeches’. Kelly used the bag in many of her films and carried it regularly after becoming Princess of Monaco.

Both Birkin and Kelly increase in value yearly, between 12-14%. The Birkin alone has seen a whopping 500% increase in its value in the past 35 years. With this in mind, it can be assumed the value of these will only continue to increase as time goes on. Although nothing is certain when it comes to consumer trends and preferences, it can be seen as a good indicator of what is to come for Hermès bags.

When looking on auction and ‘vintage’ websites for an Hermès bag, aim to spend around £4,000 on a decent Birkin. Ideally, you need to be able to check it is in good condition to expect a better profit later.

The Kelly bag also tends to increase in resale value. It is generally more affordable to new collectors when bought at auction or on a second-hand vintage website. The past decade has seen its value increase by a notable 129%. You can expect to pay a few thousand pounds for a Kelly bag that is in good condition.

Chanel

Chanel is a popular designer for first-time buyers, as it tends to be a reliable fashion investment. The timeless Chanel Flap Bag is a good starter bag as it is one of Chanel’s most defining and classic designs. With the value of such bags increasing by an impressive 132% in the last ten years, you’re guaranteed to find plenty of potential buyers when you come to sell it.

Since its launch in 1955, the Flap Bag first retailed for £154, rising to £810 in the nineties. Currently, this design will set you back almost £4,000 new. The value has increased by around 70% in recent years alone, and according to Open for Vintage, retail value increases by approximately 3% annually. These bags also hold a good resale price, so are a good investment, especially if the leather and hardware are in mint condition.

Louis Vuitton 

Louis Vuitton has been around since 1854, so not only is buying an LV bag an investment financially, but many collectors see them as owning a piece of fashion history.

The Neverfull Tote, in the classic Louis Vuitton print is one of the most popular investment pieces, due to its periodic price increases and ever high demand. It remains one of LV’s most sold bags, and not only does it come in an endless variety of materials and limited-edition collaborations, but the bag itself is reversible, and can be used ‘inside-out’, giving you two wearing options.

With these bags, it’s best to try and buy one of the rare or limited-edition bags. These tend to resell for twice their original price, at least.

Gucci

Gucci is a well-known name in the fashion industry, and is a great name to invest in. Gucci’s handbags are certainly worth considering as a financial investment due to its ever-lasting popularity.

The main Gucci pieces to consider are the famous Jackie Bag, named after former First Lady of the US Jackie Kennedy, the GG Marmont, the Queen Margaret and the Bamboo Bag. These designs have shown to be most popular and have the best resale value over time.

It is important to note with Gucci, however, is the timescale in which you should sell them to receive the most profit possible. According to Designer Vintage, Gucci often sell trend items. This means that although they are on trend and popular now, they may not be sought after in the future. They suggest selling your bag sooner rather than later, or sticking to investing in more timeless pieces, such as the Gucci Marmont bag.

Where to buy luxury and vintage handbags

It’s imperative to note that buying a new designer piece is similar to buying a new car. Unfortunately, goods lose value as soon as they leave the shop. With classic and collectible pieces, however, like the Hermès bag, they are able to regain their original value within a few years, and steadily increase after that.

If you want to make a decent profit on the whole, it’s advantageous to buy your piece second hand. Even slightly damaged bags can be professionally fixed, then kept in as impeccable condition as you can until you sell it.

“If you buy new from a shop, it will be difficult to make a profit unless the item is through-the-roof popular or is limited edition”, says James Harford-Tyrer of Cudoni. “On the secondary market it could all be worth a lot later on. The purchase price ultimately dictates what will make money”.

 

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