Kim Kardashian strikes again. The woman with the most photographed derrière in the world and global fashionistas like Victoria Beckham are the latest in a long line of stylish celebrities who have helped the high-end, high-price luxury handbag keep its iconic status—and, it has emerged, its status as an absolute, deadcert investment opportunity.
Researchers at luxury online marketplace Baghunter recently set out to compare 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 managed just 1.9 per cent. But Birkin handbags’ increase averaged 14.2 per cent, say Baghunter number crunchers. And they point out that unlike the S&P 500 and gold markets, which have fallen as well as risen, the value of Birkin handbags has never dipped, providing year-on-year increases without fail.
“Despite warning signs globally for many of the traditional investment markets towards the end of 2015, 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.”
Some of the world’s most sought-after handbags went under the hammer in December at Christie’s Hong Kong Handbags & Accessories auction, with 95 per cent of lots sold for a total of US$6.2 million, a new Christie’s record for this category. The top sale, US$153,000, was a Matte White Himalaya Niloticus Crocodile Birkin 30 with palladium elements by Hermès.
“These fgures highlight the fact that the fnest 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 handbags gold rush. In addition to Baghunter, fashionable investors can buy and sell on Portero, Snobswap and Lollipuff. But with so many opportunities and options, where should the frst-time handbag investor spend their money?
“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.”
Read the full article in our March 2016 issue.
Text by George Hopkin and Illustration by Francesca waddel.