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STYLE

How to Bag a Top Designer Handbag Investment

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We have to hand it to handbags: they’ve gone from a humble home for wallets and car keys, to an iconic status symbol selling in the tens of thousands and commanding their own waiting lists. But luxury handbags don’t just cost a bomb, they can make a ton of money, too. Aided by the likes of walking bag advertisements Kim Kardashian and Victoria Beckham, iconic handbags have become a wise investment opportunity of their own, sharing the stage with stocks and shares for their big returns.

This year, researchers at luxury online marketplace Baghunter compared the performance of three popular forms of investment: gold, the S&P 500 Index, and Hermès Birkin bags. Between 1980 and 2015, the S&P 500 returned an average of 11.66 per cent a year, while gold scraped just 1.9 per cent. On the other hand, Baghunter's number crunchers verified that the increase on Birkin handbags averaged 14.2 per cent. They also pointed out that, unlike the fluctuating S&P 500 and gold markets, the value of Birkin handbags is yet to dip, and provides year-on-year increases without fail.

“Despite warning signs globally for many of the traditional investment markets, the luxury bag industry has remained as strong as ever, experiencing continued growth with demand at an all-time high,” says Baghunter CEO Evelyn Fox. “An investor who manages to get their hands on a brand new Birkin or one in pristine condition can sell it almost immediately for up to 120 per cent of its value on the secondary market. There is simply no other investment that can offer similar prospects.”

In the recent Christie’s Hong Kong Spring Auctions, a crocodile-skin, diamond-encrusted Diamond Himalaya Birkin broke the record for the world's most expensive sold at auction, fetching nearly US$300,000.

“These figures highlight the fact that the finest and rarest handbags are now considered true collectible items,” says Matthew Rubinger, international director of handbags and accessories at Christie’s. “Fifty-two per cent of lots sold above their high estimate and six of the top 10 handbags realised more than US$100,000.”

Specialist online marketplaces have emerged to make the most of the luxury handbag gold rush. In addition to Baghunter, fashionable investors can buy and sell on on Portero, Snobswap and Lollipuff. But with so many opportunities and options, what should a first-time handbag investor be looking for?

“In terms of investments, it’s best to stick with the classics like the Hermès Birkin and Kelly bags, as well as Chanel’s Flap bags,” says Portero director Alexis Clarbour. “If you’re looking for an entry-level resale bag, try Louis Vuitton Neverfull or Speedy bags. Goyard has also become an excellent investment with their classic Saint Louis totes. We’ve seen drastic retail price increases for all over the past few years, which results in a higher resale value.”

Lollipuff co-founder and fashion blogger Fei Deyle says, “Chanel’s bags, particularly the classic designs, steadily rise in value every year, and this has been happening for well over 20 years. Darker coloured bags in durable leathers like caviar leather are particularly popular in resale because they hold up well with use.”

Regardless of the brand, it’s important to investigate the collectible market before jumping in, advises Peter Loughrey, founder of Los Angeles Modern Auctions, which specialises in 20th-century modern art and design.

“[You wouldn't] buy a house without checking out the neighbourhood or buy stocks without knowing their history,” he says. “There have been several well-advertised auctions of handbags over the last few years; look at those results and you should see some trends and patterns start to appear.”

Where buyers and sellers intend to ply their trade is also a factor. Snobswap co-founder Emily Dang says geographical trends have emerged as millions of fashion-conscious users look for investment opportunities online.

“For Asia, we are seeing increased demand for the very high-end designers such as Hermès and Chanel, as well as more minimalist designers such as Céline and Bottega Veneta,” says Dang. “In addition, we are seeing demand for contemporary designer brands such as Sandro and Maje.”

Portero’s customer base in Asia is also growing, with many of its customers investing in Hermès today, whereas they previously had favoured Chanel and Louis Vuitton.

“They understand that is where they will see the highest return,” says Portero’s Alexis Clarbour. “Many of our Asia-based customers are interested in bright-coloured bags, mini bags, as well as accessories for their bags, like Hermès twillys and charms. When these trends emerge in Asia and spread to Europe and the US, Asian resellers can flip their bags for a higher value while it is still a trend in the US.”

And while fashion by its very definition can be fleeting, don’t expect the boom in luxury accessories to dissipate any time soon, say those in the know.

“Designer clothing, handbags, shoes and accessories are not a fad,” says Deyle. “Designer goods truly are more beautiful and higher quality than lower-cost alternatives. Plus, brand recognition is important to many fashion lovers out there. And when bought pre-owned, the prices can be heavily discounted. Personally, I prefer a high-end, well-made Chanel bag over 10 random mediocre-quality bags. Quality over quantity is the idea, and there are many people out there who believe the same.”

Dang agrees that secondary markets for top-end examples have a rosy future. “The resale and consignment industry has been around for decades and online resale is the fastest-growing e-commerce trend,” she says. “Given the value appreciation of certain brands and the fact that resale is recession-proof, resale will be around for a very long time.”

Original article written by George Hopkin for Hong Kong Tatler

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