Experts Weigh In: The Best Investment You Can Make is a Designer Handbag

Experts are saying luxury handbags might be the best investment right now. Before you object, know that the rate of appreciation is surprisingly quick.

You may want to forget about allotting your hard earned dollars into equity or stocks; experts are saying luxury handbags might be the best investment right now. Yes, a five-digit price tag for a handbag seems outrageous, but before you object, know that the rate of appreciation is surprisingly quick. That $20,000 Hermes Birkin hanging on your arm isn’t frivolous, it’s actually a gold mine.

While domestic stocks such as banks, housing and real estate have been volatile due to the state of the economy in recent years, designer bags provide some of the most lucrative returns. The Financial Times states that the medium classic Chanel Flap Bag has risen in value by more than 230 percent in the last twelve years.

To give you an idea, at auction, this particular Chanel bag would go for around $5,000 while it roughly would have cost $1,400 in 2004.

If you need more convincing, Tammy Smulders, global managing director of Hava LuxHub tells the Financial Times that, “Hermes is without a doubt the most established collectable brand.” In June last year a Hermes Himalayan Nilo Crocodile Birkin handbag sold at auction in Hong Kong for just over $300,000.

However, not every designer bag will reap you rewards. The best bags to invest in are classic styles with a limited number of production, limited editions, or bags constructed with exotic skins and materials. Along with construction, artists merit and associations of famous icons with the bag are also factors to consider.

Best-performing handbags 2004-2016

  1. Chanel 2.55 Medium Classic Flap Bag: up 10.6% per annum to $5,000
  2. Hermes 1990s Cognac Leather 40cm Birkin: up 10.3% pa to $13,000
  3. Emilio Pucci 1970s Black Leather & Velvet Pucci handbag: up 8.8% pa to $550
  4. Christian Dior Lady Dior Cannage: up 8.5% pa to $4,000
  5. Coach 1960s Leather Sling Bag: up 7.9% pa to $250

Experts also say those wishing to invest in designer handbags need to consider supply and demand, along with the condition of the bag as well; the more you use it, the quicker the bag will devalue. True collectors deposit their ‘investments’ in a bank out of sunlight, complete with duster bags, and tissue paper for stuffing.

Some of you might be saying, what’s the point of purchasing a designer bag if you can’t use it? Well… for the majority of us who aren’t hardcore collectors, a designer bag still remains a good investment even with light use.

A report last year by the luxury resale site Vestiaire Collective revealed that designer bags possessing the traits mentioned above (quality, durability and rarity) recoup an average of 75 percent of their retail value; still a substantial future return. In addition, the market for “future antiques” (pieces that are unobvious collectables now) is definitely growing too.

So while you might not be willing to fork up $300,000 for a Hermes bag, someone else is. It turns out a designer handbag might actually be one of the best investments you can make right now.

Would you invest in a designer handbag? Share with us in the comments.

Featured image: Instagram/@louisvuitton

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