Last year, Hermès bags increased 17% in value – more than any other luxury item including art, wine and collectible cars. In these turbulent times and amid volatile stocks, can vintage and designer bags really surpass market returns? and what’s the long-term outlook?
Every investor knows the key to a stable portfolio is diversification. Traditionally, this meant holding different asset classes and securities. But today, more and more people are branching out and putting their faith in highly sought-after accessories.
High-end watches have long been considered collectors’ items – think Rolex Submariners or Cartier Tanks – but Birken, Dior and Chanel are the brands currently on the connoisseurs’ lips.
There’s a host of reasons why people are currently opting to invest in handbags. First and foremost is the state of the economy. Fears of a global recession are growing, and this is pulling the market downwards.
At the time of writing, inflation in the UK had hit a 40-year high of 9.4%, while in the US, this figure had climbed to 9.1% – the largest increase since November 1981.
This has spooked investors and the markets have suffered significantly. Here’s where many believe that smart purchases can prove beneficial.
In February, The Telegraph reported that the price of a Chanel 2.55 handbag had increased by 50% since 2019 – from just under £3,104 to £4,583. That’s a bigger percentage rise than houses in the Cotswolds, which rose by 23% during the same period.
In the same article, Rachel Reavley, Director of high-end resale site Hardly Ever Worn It, reported that 15% of its 200,000 registered users now make some or part of their living “playing the bag market”.
This doesn’t look to be a flash in the pan trend, either. In fact, over a 10-year period, handbags have more than doubled in value. They are up 108% – seriously outpacing gold’s 29% return.
Jersey boys and girls
Famous and match-worn sports shirts are another vintage item becoming big money. In May, Maradona’s Hand of God shirt – the jersey the late Argentinian football legend wore in the famous game against England at the 1986 World Cup – sold for £7,142,500. This made it officially the most expensive piece of sports memorabilia of all time.
Previously, it was a top worn by Brazil’s Pelé – considered by many as Maradona’s rival for the coveted title of the greatest of all time – that held this accolade, selling for £157,750 back in March 2002.
This shirt actually had a list-price at Christie’s of £30,000, so it came as something of a shock when it was sold for five times that.
According to the BBC, football shirt collecting is surging in popularity. Dutch football fan Arjan Wijngaard is thought to have one of the largest personal assemblages in Europe, with an entire room in his house dedicated to the 3,000 tops he has spent 25 years sourcing, each of which is logged in a comprehensive online catalogue.
A handle on the market
As with any asset, when it comes to handbags it pays to educate yourself and occasionally be a bit risky.
Take Bottega Veneta: following three years of new creative leadership, the brand has produced seriously desirable handbags such as the Pouch and the Cassette Crossbody.
If this success continues, luxury resale retailer Rebag’s Clair Report predicts that the Italian fashion house could inch closer to the status of Dior, Hermès, Chanel and Louis Vuitton.
Knowledge such as this could pay dividends by informing savvy shoppers of who they should be keeping a close eye on.
Distinct changes in direction are worth paying attention to, as well. There are, for example, signs that Tiffany & Co is set to become a much more coveted brand.
The reasons behind this include the luxury retailer’s recent acquisition by LVMH and, vitally, Jay-Z, Beyoncé and British tennis star Emma Raducanu being named as its new faces.
Collaborations are often noteworthy, too. Take Louis Vuitton x Murakami, which appeared on the Spring/Summer 2003 runway. The bags were instant hits.
Later collections included the Cherry Blossom in 2005 and the Monogramouflage, which launched in 2008. The latter had a retail price of around $1,500 but today, 13 years on, resells for more than $9,000.
It’s well worth investigating which brands regularly spearhead partnerships and how much they rise in value over time. The same logic can be applied to high-street fashion collabs too, such as Nike x Off White, Adidas x Gucci, Vans x Karl Lagerfeld or the Hermès Apple Watch.
If you’re less willing to gamble and are buying purely for investment, classic items are almost always the best route.
Buying at auction is also highly recommended. As a result of the expertise available, you’ll be all but guaranteed an authentic item. You’ll also benefit from absolute transparency, so you shouldn’t encounter any nasty surprises when it comes to quality.
Even if you aren’t buying with selling in mind, wherever you get the goods from, be sure to keep the original packaging and documentation.
Ultimately, given the performance of certain brands over the past 10 years, it’s a good bet that the right bags offer a viable investment opportunity and will continue to do so.
And while you might have no intention of putting them on the market in your lifetime, they could make ideal items to pass on to your heirs, especially if you’ve put sufficient research into your purchase.
And don’t be afraid to occasionally use these items, albeit with care. Yes, quality will be hugely important if you opt to part with them in the future – so try to rotate bags – but experts believe that small flaws and wear and tear will be forgiven for the right investment piece.
That certainly sounds like money in your wallet – or clutch.
TLC: the key to preserving value
Unless you are planning to amass a vast number, items of clothing or accessories are a great deal easier to store than other passion items – you certainly don’t need an entire garage, mooring or cellar to house handbags, watches or football shirts. Here are some high-level tips for keeping your collectibles in pristine condition.
• Handbags should be stuffed – preferably using acid-free tissue paper, a small pillow or bubble wrap.
• Wrap any exposed hardware (buckles, zipper pulls) in a piece of tissue paper to keep them from making imprints on your bag over time.
• Keep items in soft, breathable dust bags that are large enough for the item in question and so don’t warp the shape when stored.
• For clothing, including football shirts, avoid wire hangers, which are riskier when it comes to pulls and could leave marks or creases on more delicate items.
• Again, consider dust bags – older shirts are made of cotton or other organic materials that could attract moths.
• If you’re using plastic zippable wallets or boxes, add a pack of silica gel to help absorb any moisture that might build up over time.
• All items should be kept out of direct sunlight and, if you’ve bought them second hand, they should be cleaned – professionally in the case of handbags – before storing.
Three timeless big hitters
Here are the bags to top your investment wish list:
• Chanel’s 11.12 Bag, otherwise known as the Chanel Classic Flap Bag. Based on Coco Chanel’s 2.55 design, this bag was created by Karl Lagerfeld when he arrived at Chanel in 1982.
• Supreme shirts, hoodies, shoes and accessories. Supreme is a cult streetwear brand known for its extremely limited releases and artist capsule collections. Pieces from the 2017 Fall/Winter Supreme x Louis Vuitton collection have already sold for double their retail value.
• Hermès Birkin. The Holy Grail of handbags. Created in 1984, it was originally designed for, and then named after, actor Jane Birkin. It has since ascended to nothing short of cult status and has a price tag and wait list to prove it.