Investing in luxury handbags: more profitable than the property sector

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It’s not uncommon to see Chiara Ferragni’s wardrobe featuring some of the models we’re about to introduce. Have you considered that she’s making an investment with returns exceeding an initial 14%, tax-free and without issues like tenants or squatters? Luxury iconic handbags are not just accessories; they’re works of art, a style statement, and for many, a highly profitable investment.

But why are they considered a profitable investment?

1. Timeless Appeal

Unlike other luxury goods, a well-preserved handbag doesn’t lose its functionality over time. In fact, many handbags gain character and allure with wear, potentially increasing their value.

2. Limited Editions

Luxury brands often release special or limited editions that become highly sought-after by collectors and enthusiasts. These editions rarely depreciate in value, and in many cases, their prices multiply over the years.

3. Global Recognition

Iconic brands like Chanel, Hermès, and Louis Vuitton are globally recognised. This universality ensures there’s always a global demand, regardless of local fashion trends.

4. Quality Craftsmanship

Luxury handbags are made to the highest quality standards, using premium materials. This durability ensures that with the right care, the bag can last decades, if not more.

Handbags that appreciate over time:

1. Hermès Birkin

Perhaps the most iconic of all, the Birkin has seen a steady increase in its value since its inception. It’s known for its multi-year waiting lists and fetching astronomical prices at auctions.

• Initial Cost: Depending on size, type of leather, and other details, a Birkin can range from $10,000 to $500,000 USD. The most exclusive and rare editions, like those made from crocodile skin adorned with diamonds, can cost even more. • Appreciation: Over the years, Birkins have been documented to appreciate in value by up to 14% annually. At auctions, some rare Birkins have fetched over $500,000 USD.

2. Chanel Flap Bag

A timeless classic. Its iconic design and construction quality have made it one of the most desired handbags in the world.

• Initial Cost: Prices start around $3,500 for the smaller ones and can go up to $7,000 or more for larger sizes and special editions. • Appreciation: The Chanel Flap Bag’s value is estimated to have risen by over 70% in the past decade. Rare or limited edition designs can be even more valuable in the secondary market.

3. Louis Vuitton Neverfull

While not as pricey as the Birkin or the Flap Bag in the primary market, the Neverfull is known for its durability and functionality, making it a sound investment.

• Initial Cost: Prices range between $1,300 and $3,000, depending on size and design. • Appreciation: Although the Neverfull hasn’t seen as spectacular an appreciation as the Birkin or the Flap Bag, it remains a solid investment. Its value is estimated to have risen by about 65% in the last ten years.

4. Dior Lady Dior

Named in honour of Princess Diana, this bag has maintained its popularity and value over the years, thanks to its distinctive design and royal association.

• Initial Cost: Prices start around $4,000 and can go up to $8,000 or more for larger sizes or special designs. • Appreciation: Over the years, the Lady Dior has seen a steady appreciation, increasing by roughly 8-10% annually.

These figures should be taken as general references since the luxury handbag market can be influenced by various factors. It’s crucial to do your research and consult with experts before making a significant investment.