In a landscape of stocks, bonds, property and more, designer handbags may not seem like the most obvious way to diversify your investments, but they’re certainly worth taking a look at.
Designer handbags are widely believed to be good investments. According to the Knight Frank Luxury Investment Index, handbags were better investments than stamps, art, and rare whiskey last year. Tempting? Although these statistics might be a reason to justify a new handbag purchase, investing is always a risky business, especially when you are talking about things that you might want to wear and use, and that go in and out of fashion.
Therefore, we asked for some advice from Communications & Community Manager Katie MacNaughton who works at Open for Vintage, a luxury marketplace for designer vintage.
“At Open for Vintage, we firmly believe the words ‘handbag’ and ‘investment’ belong together”, MacNaughton says.
“Accessories, and handbags in particular, will always be the ‘it’ item within fashion, and we believe the best way to get the most from your money is to buy into timeless, classic brands and designs.”
Handbags can be considered as “wardrobe investments” or “financial investments”. Wardrobe investments are clothes or accessories that might have a higher price tag but what you can wear for years and years and that way justify the high price. A financial investment means putting your money in a bag you believe to increase in market value, and sell it later with a profit.
How to choose a handbag that you will wear for a long time, on many occasions, and stays also style-wise relevant?
“When it comes to choosing a handbag that will remain timeless, there are three main tips that we would advise on:
1) Go for a classic, rectangular or square-shaped, silhouette. Whether it’s a day-to-day tote bag or a rectangular crossbody shape, you want to go for a bag that is designed to be classic forever. Sometimes more contemporary designs that experiment with new shapes can become less on-trend as the years pass.
2) Go for a neutral color. A classic black, or a neutral beige or brown tone are always savvy colorways to invest in. A neutral handbag not only remains timeless for longer but generally can be styled with more outfits, meaning you can get the maximum wear out of it.
3) Go for a durable material. If you want a bag that you can enjoy for a long time, you want to ensure that it’s made well, and from a fabric that can stand the test of time. The best vintage option is leather, and in particular, a leather with a grain or texture to it, to avoid the showing of any scratches or marks. Some great examples are Prada’s Saffiano leather, Louis Vuitton’s Epi leather, and Chanel’s Caviar leather.”
How about handbags as financial investments: what is your take on this – are handbags good financial investments or no? What kind of investments are they compared to other investments you can make: stocks, watches, real estate, etc.?
”Investing in vintage luxury handbags can be an extremely lucrative investment, but like all investments, research is necessary. For those looking to make a first designer investment that will retain, or even increase in value, we always recommend a classic Chanel bag. According to our data, the retail prices of these bags increase anywhere between 4% and 25% each year, so if you are able to buy a vintage version and take good care of it, you will almost definitely make a profit if you ever chose to sell.
For those looking to make a bolder investment, Hermès handbags are the answer. According to a 2016 study by Baghunter resale platform, the Hermès Birkin far outperformed the price of gold in the 35 years prior and had a higher return of investment rate than both gold and the stock market, increasing in value steadily every year and offering an average annual increase in the value of 14.2%.”
In addition to researching the value history, it’s also important to research and estimate things like expected selling costs, inflation, liquidity, and taxation in advance. So, if I’m interested, how would I get started in investing financially in handbags?
“Firstly, you should establish a budget. You can make a savvy investment with a budget of £200 or £20,000, providing you look for the right brands and styles. Once you have your budget in mind, do some research on the vintage luxury handbags that are continuously in demand, and within your price range, and start browsing. One of the amazing things about vintage shopping is the process of discovery – enjoy the experience! Classic heritage fashion houses such as Louis Vuitton, Christian Dior, Chanel, and Hermès are always great to look at for this. Look for vintage pieces that are in good condition, and always ensure they are authenticated before you buy.”
Fashion changes, and so do handbag trends. A bag that is on-trend now is not necessarily desirable 10 or 15 years from now. But are there some trending, newer handbags in 2020 that you predict will also keep their value in the long run?
“The new Chanel 19 bag has become an instant favorite amongst fashion communities around the world, and we feel its timeless design and day-to-night shape stands it in good stead to be a favorite for decades to come.
Additionally, limited-edition releases from coveted brands like Louis Vuitton are always a good bet for a future return on investment. The brand’s recent Escale Collection will likely be highly sought-after as availability decreases over the coming years.”
Even a minor scratch or stain can diminish the handbag’s resale value. Most resellers want their handbags in pristine condition. Can you also share some tips on how to keep your bag clean and fresh to keep its resale value?
“Good care and storage of your vintage piece are vital, as it will ensure your item keeps its quality so that you can enjoy it for longer, or resell it for more money. When it comes to handbags, we advise the following:
1. Keep the bag in a dustbag.
2. Keep it away from the elements, as well as direct sunlight.
3. Use paper or fabric to stuff your bag when you aren’t using it. This will help it to keep its structure.
4. Use appropriate material cleaner where necessary – ensure you research the best way to clean your particular fabric first!
5. At Open for Vintage, we publish brand-specific care guides on our journal to inform you of best practices for protecting your vintage handbag.”