Designer handbags can be a better investment option than property, shares
What can give you up to five times the return on your investment as real estate and as much as 10 per cent more than the ASX, and could be hiding in your wardrobe?
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What can give you up to five times the return on your investment as real estate and as much as 10 per cent more than the ASX 200?
Designer handbags.
In our series on alternative investments, we look at the high-end handbag market and experts insist it can equal big bucks if you know what you’re doing.
“If people are savvy about what style of designer bag they invest in and how long they wait before reselling, designer handbags can be a tremendously good investment,” said Miranda Gillespie, from Luxe It FWD.
“The reason is that in recent years the prices of designer handbags have soared well in excess of inflation over that same period.”
The reseller of luxury goods has seen a Chanel Classic Flap Bag increase by 30 per cent in just two years, selling for a $2000 profit, while another customer made a 70 per cent profit in 24 months on a Louis Vuitton Monogram Pochette bag.
With real estate rising by 6.45 per cent nationally in the same two-year period and the ASX 200 increasing by 19.6 per cent in that time, Ms Gillespie said bags held their own.
“Investing in a designer bag can be better than investing in real estate or shares – or even both combined,” she said.
Shael Dawson, of Monty’s Brisbane, which specialises in luxury handbag authentications, agreed and said they were becoming a highly sought investment.
“Pre-loved luxury bags are what we call ‘wearable investments’,” he said, noting he had seen some bags, like the Chanel Classic Flap, double in price in just a few years, while the Louis Vuitton Speedy had been increasing 5 to 10 per cent each year.
“In recent years, the demand has been strong partly due to the increased demand from a younger demographic.”
So what should one be looking for?
It was all about the classics, Ms Gillespie said.
“Pricing in the resale market is driven by the level of demand for a particular style, and what has the highest demand is classic visibly designer styles,” she said.
That means, Louis Vuitton monogram bags, classic Chanel flap bags with the visible CC, Gucci bags with the oversized interlocking GG hardware, or the iconic Hermes Birkin bag.
And forget colours. Black or neutral bags that can be used daily are the most in-demand.
“Many people may think that, ‘Oh if I have this green limited-edition style then it must be worth so much because it’s unusual’, whereas generally it’s the opposite of that,” Ms Gillespie said.
Those with the most potential to increase in value, however, were limited edition bags, but they did not come without risks.
“Once they stop production they can become incredibly sought after,” Mr Dawson said.
“But they’re also riskier because their experimental styles are often tied to trends that might not stand the test of time.”
As for whether to buy a bag new or second hand, Mr Dawson said preloved was always best as you were already buying at a discount allowing for the greatest potential for an increase in price over time.
It was also important to buy from a reputable dealer to ensure you did not buy a fake, given that the internet was flooded with knock-offs.
Their other tip was to keep all the bag’s accessories. That includes the box, dust bag, packaging and authenticity cards, which would greatly increase the resale value and make them easier to sell.
“The luxury handbag resale market also continues to hold strong during challenging economic times like current, meaning investment in luxury bags can be far less volatile than other investment types,” Ms Gillespie said.
Originally published as Designer handbags can be a better investment option than property, shares
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