Handbags as Assets: Exploring Their Investment Potential in 2024 and Beyond with Anna Grace Johnson.

Handbags as Assets: Exploring Their Investment Potential in 2024 and Beyond with Anna Grace Johnson.

Have you ever wondered why handbags have become the talk of the town in the world of collectibles and investments? In this eye-opening journey, we dive into the fascinating universe of luxury handbags, exploring their unique allure and investment potential.

Guiding us through this stylish landscape is none other than Anna Grace Johnson, a renowned Handbag Expert with Prestige Asset Finance Ltd, “Posh Pawn,” in London, United Kingdom. With her in-depth knowledge and industry experience, Anna Grace provides us exclusive insights that unravel the mystique of these coveted accessories.

From the sands of Ancient Egypt to the bustling streets of modern cities, handbags have not only evolved in style but also in purpose. Today, they are not just fashion statements but smart investment choices. With the global market for luxury handbags set to soar, we'll discover why savvy investors are turning their eyes towards these elegant assets.

Join us as we reveal why handbags are outperforming other collectibles, the specific models that are winning the investment race, and how these fashion icons sustain their value even in turbulent markets. Get ready to be inspired by the blend of fashion, history, and smart investing!

Why handbags over other collectibles?

Throughout history, handbags have been significant in the way that we as people wish to convey our lifestyles. Whether it be men from Ancient Egypt carrying a pouch around their waist, Victorian men using their briefcases to carry to work, Coco Chanel “declaring” independence for women by adding a strap onto the traditional handbag, or Grace Kelly using the Hermès Sac à Dépêches to conceal her pregnancy—the evolution of the handbag is ever-changing to fit the needs of modern society.

While more traditional investors have taken routes such as real estate, art, or the stock market, a more avant-garde investor looks to a sector that is set to reach a global market value of $100 billion by 2026. Certain luxury handbags, over the past decade, have consistently sold on the second-hand market at prices 85% to 110% higher than their original retail price (RRP).

During the first month of 2024, we have already seen two major fashion houses increase their prices globally by anywhere from 6%-17% depending on the model. This means, from an investment standpoint, that second-hand retailers or lenders will pay more for particular models compared to previous years—some businesses even up to 80% of their second-hand value.

Luxury handbags, like all investments, have seen a slight decline in the past 6 months, due to the current economic situation. Despite this, now is the time to find the perfect investment piece.

Hermes Kelly 25cm Bag. Source -Prestige Pawnbrokers

What specific models are performing well?

When the concept of “handbags as investments” first began gaining traction, it was depicted that all handbags from all brands are good investments. Unfortunately, this is simply not true. Brands such as Hermès, Chanel, and Goyard hold a level of mystique and desirability that help elevate their values on the secondary market, compared to brands such as Burberry, Prada, Valentino, and even some Louis Vuitton models.

Why is this?

In my personal opinion, it comes down to two factors:

Outlet Malls: When brands opt to create a line for outlet malls, this does, of course, make the brand more obtainable for the mass consumer, but it means that clients are able to receive up to 65% off RRP. This drives the desire (and price) down on the second-hand market due to mass availability.
Brand Collaborations: Collaborations such as Fendance, Balenciaga X Gucci, and even Supreme X Louis Vuitton help define a generation—what our values were, what style was popular, what art influenced us, and many more. But due to these collaborations being so stylized, they are popular for this day and time, but will they be able to stand the test of time? Typically the answer is no, besides the notable exception of the Takashi Murakami x Louis Vuitton collaboration that has seen a recent revival—with models such as the Mini HL Speedy increasing 200% in resale prices—due to the current influence of the Y2K movement.

Brands that have consistently done well have done so due to their reputation, desirability, and craftsmanship. Brands such as Hermès, Goyard, and now even Louis Vuitton have introduced a wait list for popular items. These practices help fuel their desirability on the second-hand market due to the lack of availability.

Hermes Birkin 30cm Bag. Source -Prestige Pawnbrokers

These models include:

  • Hermès Birkin 30: RRP: $12,500. Avg Resale: $22,000+ depending on hardware color, age, and leather color
  • Hermès Kelly 25: RRP: $11,800 Avg Resale: $25,000+ depending on hardware color, age, and leather color
  • Hermès Herbag 31: RRP: $3,050. Avg Resale: $3,400+ depending on color and condition
  • Hermès Kelly Picotin: RRP: $14,680. Avg Resale (Sotheby's): $50K+

The Chanel Classic Flap bag has increased to upwards of $11,850 for their Medium model. This is a large jump considering 10 years ago their price was $4,900. While the newer models of the Chanel Classics are unable to achieve these high ROIs, now is the perfect time to sell those vintage Chanel's. The medium Chanel Classic Double Flap sells on average for $5,000+ depending on leather type, age, and hardware color.

The international market - what is going on? Who are the buyers?

Globally, the second-hand market has seen a slight decline in the luxury sector, but I believe within the year this will begin to rise again as people have more disposable income.

Regarding international trends, just like people, every country is different. My clients from North America love bold statement pieces from the likes of Chanel, Louis Vuitton, and Gucci.

While the recent rise of the “Quiet Luxury” era has seen an increase in brands such as The Row, Bottega Veneta, and Saint Laurent, my clients from Europe have consistently preferred minimal branding, craftsmanship, and neutral colors from brands such as Chanel, Hermès, and Loewe.

Exotic leathers such as matte Alligator, as well as smaller handbags like the Hermès Mini Kelly or Chanel Métiers D’Art Pieces, are most popular among my clients from the Middle East. While my clients from the Far East love Christian Dior and extremely rare Hermès handbags such as the Hermès Kelly Qu’elle Idole.

Other brands and models that are doing well?

The House of Goyard (renamed in 1852) started out like many others in their time, by making traveling trunks. Since then, the company has evolved their models, but not their commitment to craftsmanship. Totes such as the St Louis and Anjou are known for their weightlessness, ability to flatten, and their waterproof nature. With only 35 stores in the entire world, and no online store presence, most clients are forced to purchase their goods via secondary retailers. Due to this lack of availability, the value of these handbags has risen over the past couple of years, landing the brand as one of Lyst’s 2023 Q2 “breakout brands.”

The Chanel “Kelly” handbag
This model was first introduced as a larger version in the late 1980s and then discontinued. Released in 2023, the Chanel Kelly handbag is currently one of the hottest items on the market.
Chanel Mini “Kelly”
RRP: £3,690. Avg Resale: £5,000+ depending on condition and accessories.
A BLACK QUILTED CALFSKIN LEATHER MINI RECTANGULAR CLASSIC FLAP BAG WITH LIGHT GOLD HARDWARE, CHANEL, 2020. Source - Christie's.

How do you get the most out of your investment?

Keep Everything! I always tell my clients when purchasing their items that the more they give me, the more I can give them. This means that the more accessories your item comes with, the better offer you are able to receive. Storage and condition of the handbag are also extremely important. By properly storing your luxury handbag, you ensure that it maintains its original shape and allows for the leather to properly breathe in a non-humid environment.

How Do Luxury Handbags Sustain Value in a Volatile Market Compared to Other Investment Forms?

Handbags are proving to retain their value, remaining stable even in a turbulent market. I believe this is due in part to their independence from other market factors. In real estate, performance heavily relies on banking criteria and interest rates, currently at their highest since 2008. Meanwhile, the stock market is heavily influenced by global events. A handbag’s return on investment, and that of luxury items in general, is based upon consumer desirability. This is why only certain models from certain brands perform better than others. Handbags, compared to other forms of investment, are also more easily accessible to both novice and veteran investors alike.

Conclusion

our exploration with handbag expert Anna Grace Johnson has revealed the unique and compelling reasons behind the rising popularity of luxury handbags as a viable investment option. From their rich historical significance to their resilience in maintaining value amidst market fluctuations, these stylish assets offer more than just aesthetic appeal. Key models from prestigious brands like Hermès, Chanel, and Goyard have demonstrated remarkable investment potential, outperforming other luxury items and even traditional investment forms. Whether for the seasoned investor or the fashion-conscious newbie, luxury handbags present an accessible and potentially lucrative opportunity. As the landscape of investment evolves, the allure of luxury handbags continues to shine, promising both style and substance for those who choose to invest in them.

References

1. Luxury handbags are set to be a $100 billion industry by 2027 according to the market firm Euromonitor International.

2. According to Rebag’s blog, the Mini Speedy HL has risen 200% in resale price*
https://www.rebag.com/thevault/louis-vuitton-101-takashi-murakamis-monogram-multicolor-collection/

3. According to the Financial Times in May 2023, interest rates have been the highest since 2008
https://www.ft.com/content/984bf7bb-8782-402f-bf4a-70ff90fbaf70

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