Handbags and Investment
We are all familiar with investing in art, bonds and stock, but it may come as a shock to know that over the past decade the value of the most sought-after luxury handbags has risen by an average of 8 % a year matching the annualised returns of the FTSE.
So what should you look for when buying a handbag as an investment piece? Which brands are currently delivering the best returns?
Three handbags that will make you money
The top three handbags that are likely to provide you a with return on your investment (and have you looking fabulous at the same time) are:
- Hermes Birkin
The Birkin bag is currently a better investment than gold, according to Baghunter, an online luxury handbag marketplace. Since it first hit the market in 1981, the Birkin bag outpaced both the S&P 500 and the price of gold. Baghunter states that the annual return on a Birkin was 14.2%, compared to the S&P average of 8.7% a year and gold -1.5%.
Why you ask?
Part of the reason for the soundness of the investment is the mindboggling scarcity of the item.The current waiting time for a new Birkin bag is six years and there is no guarantee that you will be able to even make a purchase. The idea of having a waiting list for a Birkin or, in fact, any Hermes bag, unless you are part of the super-elite or a celebrity, has been considered.
In July 2015, a bespoke Barbie-pink crocodile skin bag, with diamond-encrusted hardware became the most expensive handbag ever sold at auction, going for £146,000 at Christies in Hong Kong. Interesting fact: The Birkin bag was conceived when actress Jane Birkin was on the same flight as Hermes boss Jean-Louis Dumas and complained about not being able to find a good leather weekend bag.
2. Chanel Medium Classic Flap
Yes, everyone has a Chanel handbag these days, but don’t discount their investment value. According to Baghunter, the Chanel Medium Classic Flap handbag has increased in value 70% since 1955, with values skyrocketing over the last six years.
The 2.55 bag is also a great investment because it is reinvented every year, making vintage ones highly sort after, especially the rarer jersey versions.
Interesting fact: 2.55 is reference to the date Coco Chanel debuted her classic shoulder-carried bag which changed fashion history. Prior to its launch, a woman of status would never sling a bag over her shoulder.
- Hermes Kelly
The ultimate in classic design and style, the Kelly handbag takes around 18 hours to make with the use of exotic materials, hand stitching and carefully constructed details all involved during the process.
Earlier this year a red lizard-skin vintage Kelly sold at the Artcurial auction for 23,500 and a 28cm red crocodile-skin Kelly went for 38,500.
Interesting fact: The Kelly entered fashion history when a picture of Princess Grace was featured on the cover of Life magazine using the bag to cover her baby bump. The public were the first to refer to the bag as the Kelly bag, leading Hermes to officially rename it.
How to spot a great investment bag
Even though the three brands mentioned above are likely to provide a solid return on investment, there are still aspects you need to bear in mind to ensure you can sell the handbag at a profit in years to come. This also applies when considering other luxury brands such as Louis Vuitton, Bottega Veneta or Prada.
Consider colour
Investment pieces are usually classic, so be safe and choose neutral shades. Fashion colours can quickly become out of date, whereas black, brown and cream will compliment any outfit, in any time period.
Limited editions
There is no guarantee a limited edition of a bag will sell in the future so make sure you choose a conservative style that is unlikely to date.
Keep it in good condition
To get a return on your investment, your bag must be in mint condition. As such you might want to consider storing it securely and using a more practical piece to carry the baby wipes, lippy and mobile.
How to spot a fake
Knock-offs abound in the luxury handbag market. However, if you pay attention to the detail, you can spot a fake a mile away.
Workmanship
The stitching of a luxury handbag will be flawless, the seams will always match and the logo will never be split.
Peer inside
If you are buying online, it is highly unlikely that a counterfeit bag will have a view of the inside. Fake bags may look great on the outside but not on the inside. The genuine item is perfect inside and out.
Material
Has a synthetic thread been used? Does the leather feel greasy to touch? Do the metal clasps look cheap and have a blue tint? If so, then you are likely looking at a knock-off.
Prices are rising year on year and the market for luxury handbags shows no signs of slowing. Obtaining expert legal advice on how to manage your asset will ensure you receive the best return on investment.
Saracens Solicitors is a multi-service law firm based opposite Marble Arch on the North side of Hyde Park in London. ,We have years of experience in advising high-net-worth individuals and their representatives on the purchase of luxury goods. For more information, please call our office on 020 3588 3500.
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