Luxury bags: are they worth the cost? Dior, Chanel, and Hermès are all examples of heritage brands experts suggest you buy
- The value of luxury fashion products like handbags, watches, and jewelry has grown over time, attracting investors to explore them – but don’t sell them all just yet
- Classic Chanel Flap Bags and Hermes Birkins tend to appreciate in value, however, be prepared to pay more upfront. If you can’t decide which bag to purchase, opt for timeless staples and neutral colors.
Chanel bags have increased 100 percent in price over the past decade alone. Not only fashion enthusiasts, but also investors are attracted to it because of its rarity.
Gold and the stock market have benefited from its price growth, which has not slowed. Chanel isn’t the only designer brand whose prices are rising, other items such as jewelry, watches, and bags are as well.
Are luxury bags worth the investment? According to experts, it is not necessarily true.
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According to Thomas Kralow, professional investor, financial markets expert, and founder of an online learning platform for traders and investors, “most of the time, the answer is no.” An item’s value drops instantly the second it is used, even if it is kept untouched. Fashion trends, consumer preferences, and economic conditions can affect the price of a bag even if it is left untouched.
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In addition, the market for luxury bags is highly speculative and subject to fluctuations, so predicting whether it will hold its value over time is impossible unless you own a high-quality product from a legacy brand.”
In recent years, that has changed slowly. He noted that the situation has changed, with legacy brands raising prices dramatically, which usually results in fewer sales. With time, this scarcity increases resale prices.
Kralow continues: “Plus, the luxury bag market is highly speculative and subject to fluctuation, so you cannot predict its value over time unless you have a highly desirable product made by a legacy brand.”
In recent years, that has changed slowly. He noted that the situation has changed, with legacy brands raising prices dramatically, which usually results in fewer sales. With time, this scarcity increases resale prices.
Although the stock market increased by 10% and gold by 21% over the past decade, Chanel bags have increased in value up to 100%, even after they swapped their 24-carat gold buckle for cheaper materials. These days, a classic bag from the brand is worth more than $10,000, compared with $1650 in 2005.
“Just recently, actress Christina Ricci sold her Chanel bag collection to fund her divorce, using her luxury goods as investments instead of accessories,” Kralow said.
The demand for luxury bags is not just limited to Chanel. A HermEs Birkin in 2000 cost US$4,000 and today costs over US$11.00, so yes, luxury bags can be a good investment, depending on the brand and product.” he concluded.
Keep these tips in mind if you’re committed to investing in your favorite fashion brands…
Looking for a bag or a brand but not sure which to choose? Insights from Krakow:
1. Make your choice from a timeless staple. In contrast, the classic Chanel Flap Bag never goes out of style, while the Dior Saddle Bag is trendy every 20 years. The chances are you will not be able to sell a trendy item for years or decades if you invest in one.
2. Furthermore, unique and limited edition luxury pieces can still increase in value. In the past, the Himalaya Birkin, valued at over US$440,000 at auction, or the Ombre Birkin were two of the most expensive bags. You will have to pay upfront for these bags.
3. It is always a good idea to stick with neutral colors and designs. The color or pattern won’t go out of style, so it’s a safer investment. Your investment will be difficult to sell later if you do this.
