Handbags as Alternative Investments - Part 2


Happy Monday MHH Girl!

It's a new week, which means another opportunity to delve deeper into the investment value of luxury handbags with our #HauteMoneyMonday series. 

Have you ever wondered about the return on investment on certain luxury handbags? If so, look no further and prepare to be AMAZED

 

Before we begin…

As we mentioned last week, handbags may be beautiful and sought after, but not every bag is deemed to be investment grade”. Certain brands have longevity, but others suffer either from the reality of changing tastes or the unattractiveness associated with overproduction.

While the value of luxury handbags can vary due to styles and rarity, Hermès, Chanel and Louis Vuitton in certain styles have the highest resale price. Particular styles are issued in limited numbers, demand tends to outshine supply and values will always remain strong.

Eager collectors should look for three main factors: brand, rarity and exotic skins, such as crocodile. There are also specialist labels such as Judith Leiber which use artistic themes and can provide investment opportunities. The Jennifer” currently retails for $7,995.

 

Other Judith Leiber artistic creations include these "one of a kind" pieces: 

Budding investors should seek out limited editions and special collections. Exotic skins, special materials on clasps and buckles, gemstones and embroidery can add to the value of a handbag. 

The artistic merit of the bag and associations with fashion icons is also a key factor materials are only one part of the formula. 

Now, if you have an authentic luxury handbag in your possession, then you might want to take note of the next few paragraphs… 

 

We have the list of the 5 BEST performing investment grade handbags between 2004 & 2016

 

In the 5th spot, we have Coach 1960s Leather Sling Bag: up 7.9% pa to $250

 

Coming in at number 4, we have the Christian Dior Lady Dior Cannage: up 8.5% pa to $4,000

 

The vintage Emilio Pucci 1970s Black Leather & Velvet Pucci handbag: up 8.8% pa to $550

 

Sitting comfortably at number 2 is the Hermes 1990s Cognac Leather 40cm Birkin: up 10.3% pa to $13,000

 

The QUEEN of the handbag jungle is the Chanel 2.55 Medium Classic Flap Bag: up 10.6% per annum to $5,000

 

2014 - 2016 also had its fair share of winners and this is the list of the best performers…

 

1. Hermes 1990s Cognac Leather 40cm Birkin: up 30% to $13,000

2. Coach 1960s Leather Sling Bag: up 25% to $250

3. Christian Dior Lady Dior Cannage: up 14.3% to $4,000

4. Chanel 2.55 Medium Classic Flap Bag: up 11.1% to $5,000

5. Hermes Kelly 32cm Sellier Box Calf: up 10% to $5,500

6. Louis Vuitton Classic 25 Monogram Speedy: up 10% to $550

 

In South Africa (SA), the best performing Unit Trust category over a 15 year period was SA Real Estate at 18% followed by SA Equity with 15.7%. You can see more of the detail by referring to the table below. 

Turning back to investment grade handbags, over a 12 year period, the Chanel 2.55 Medium Classic Flap Bag would have yielded a whopping return of 10.6% per annum.

Put differently, our standout star the Chanel 2.55 Medium Classic Flap Bag rose in value by more than 230%.

The Chanel bag at auction nowadays would set you back roughly $5,000, up from $1,500 in 2004. 

 

Even more mind-boggling and awe-inspiring is the Classic Medium Flap Bag’s investment performance over time as evidenced by the graph below:   

Image courtesy of Old Mutual and Morningstar.

 

 

 

If this doesn’t get you spinning wild in your chair, then we don’t know what will!!

See you next week for another chapter in our #HauteMoneyMonday series. x

 

 

 


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