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Experts Say Designer Handbags Are The Most Profitable Luxury Investment Now

Guarantee better returns on your designer purchases in the resale market by carefully making your decision with these tips. From exclusivity and uniqueness to timelessness, here’s what you should look for when purchasing a luxury handbag.

Though many may find it a tad excessive to dole out thousands of dollars for a designer bag, the surging popularity of the luxury resale market offers an astute rejoinder: the right designer handbag can offer incredible returns in the future.

Whether you’re an avid bag collector or someone who simply wants to dip your toes into the world of “designer investments”, cherry-picking the right handbag – one that’s highly coveted and will predictably hold relevance in the future zeitgeist, may be a lucrative investment to consider.

According to The Knight Frank Luxury Investment Index, designer handbags have become the most profitable luxury investment; the value of designer handbags have risen by 13 per cent over 12 months.

Key bags from mainstay brands such as Hermes, Chanel and Louis Vuitton have sustained a valuation increase of an average of 83 per cent in the last decade. According to the report, a rare Hermes handbag can even be a better investment than the artwork of a “long-expired painter”.

So how do you score the “right” luxury collectibles? Here are seven tips to help in your hunt for a designer arm candy that’ll only increase in value in time to come.

Street Style Photos Vintage Photo Mak Kian Seng/The Straits Times

This article first appeared in Her World.

1. Invest in the classics
Known as the “holy trinity” when it comes to designer handbags, heritage fashion houses Chanel, Hermes and Louis Vuitton have long been considered the unequivocal brands to turn to. There is constant demand for bags such as the Chanel Flap (above), the Chanel 2.55, Louis Vuitton’s Speedy or Neverfull, and of course, Hermes’ iconic Birkin and Kelly bags.   Certain to grow in value over time, these highly coveted bags have an excellent track record in the resale market to further prove its long standing power. According to an article published by Forbes, the Hermes Kelly’s value has increased by 129 per cent in the last decade while Chanel’s flap bags have accelerated in value by 132 per cent.   Although highly expensive, these bags are extremely valuable precisely because of how difficult they are to procure (don’t get us started on those notorious Hermes waitlists) – Louis Vuitton’s Neverfull often sells out in mere minutes after being posted on the brand’s website. So once you’ve set your sights on a piece you love, purchase it with the comforting notion that you’ll be making your hard-earned money back in due time. 2. Look for rare limited edition bags
Though opting for the classics may be a safer route to take for beginners, more seasoned collectors who don’t mind taking a risk can choose to take a leap of faith in one-of-a-kind offerings and limited edition collections. Whether made in exclusive quantities, custom-made, or created for a popular collaboration with other designers or artists, these masterpieces tend to fetch huge returns at auctions and resale markets.   Look out for rare rendition of classic designer silhouettes in exotic skins and limited edition prints, such as a Louis Vuitton Neverfull bag emblazoned with pop artist Jeff Koons’ artworks for the much-hyped about collaboration titled “Masters” (above).   Chanel’s Lego minaudiere clutch, Louis Vuitton’s Kusama Pumpkin minaudiere bag (in collaboration with Japanese artist Yayoi Kusama), and Dior’s titanium Saddle bag (in collaboration with Japanese sculptor Hajime Sorayama) are all examples of limited edition masterpieces that are now incredibly hard to find.   Hermes’ crocodile skin Himalayan Birkin is one of the rarest collectible bags to date. Featuring 18-karat white gold diamond hardware, the Himalayan Birkin was reportedly sold at a record-breaking price of over half a million dollars in 2019.   The lesson to draw from this is evident: strike while the iron is hot – or, purchase a rare limited edition designer bag the moment it is released in the market. 3. Veer towards timeless, not trendy, styles
Though it may be tempting to purchase the handbags that are riding the hype wave, steer clear of styles that feature seasonal trend-oriented elements. Raffia bags, tie-dye designs, and bags with heavy fringing may be trending right now, but their staying power may not be guaranteed in the long run.   You’ll want to look towards bags with timeless and understated styles, preferably in neutral colours that are versatile. The idea here is to look for styles that won’t look dated a decade from now. Consistent styles that are re-released in new iterations and styles every season stand a high chance in establishing themselves as classics. Examples include the Lady Dior, Celine’s minimalist box bags, Loewe’s Puzzle bag, and Fendi’s Peekaboo (above) handbag.   That said, many archival luxury bags have recently made a splashing resurgence. Bags such as Fendi’s baguette, Prada’s Re-edition 2005 nylon bag and most notably, Dior’s Saddle bag, may have dwindled in relevance after their initial hype during the ’90s and aughties as fashion’s ebb and flow of trend dictates, but their recent revival have propelled them to once again secure that in-demand it-bag status.   As it may be nearly impossible to predict which en vogue designer bags may one day align with the future zeitgeist, we’d recommend sticking to the safer classics; but if you don’t mind taking a gamble, look towards simple, functional silhouettes and designs you genuinely like – for all you know, you may just get lucky. 4. Avoid brands that have frequent sales
If you’re looking for a bag with high resale value, it’s advisable to steer away from brands that frequently discount their bags. A handbag’s value can drop significantly once it is bought if it can be easily purchased at a slashed price. Contemporary brands that come out with new seasonal lines of handbags without a distinguishable or consistent style should also be avoided, as the handbags that you may purchase from them can lose relevance and recognisability without a hitch. 5. Before purchasing, do plenty of research
Get a better grasp on a bag’s potential resale value by conducting lots of research before zeroing down to purchase it. Take a look at resale sites like Vestiaire Collective (above), TheRealReal and Rebag to observe the prices of designer bags and how they have increased in value over time to get a better idea on which particular brands or bag styles can stand the test of time. 6. Maintain its condition
Once you’ve purchased your chosen receptacle, it’s crucial that you maintain its condition. A poorly maintained, stained or abraded bag will lose its value. Keep it stored in the dust bag that comes with it (this can also help to prove the bag’s authenticity when you’re putting it up for sale) when it’s not in use, maintain the interiors and prevent it from being stained with your unsuspecting everyday necessities such as your lipsticks, loose makeup or perfume.   If you absolutely have to haul some of these items, make sure you keep them stashed in a makeup bag, but even then, you still run the risk of an ill-fated leakage. Leave stubborn stains to professional cleaners and damages to trusted repair shops or even the brand itself. Last but not least, check the weather! Leather bags do not – and we repeat, do not – get along with water, so it’s key to avoid hauling your precious purchase on rainy days. 7. Sell at the right time
Now that all is said and done, we’re down to the most important factor in selling a designer bag that will fetch you the best possible price: timing. It’s important to study and understand the market at the exact time you’re planning to sell your investment piece.   It goes without saying that bags that are highly popular and sought after will enjoy huge price hikes, so what you’re really looking at is a waiting game. At times, this could mean waiting for the bag to be exceptionally rare and difficult to source in the resale market, and other times it could be anticipating the widespread interest the fashion crowd could suddenly take in its style.   There are, of course, exceptions to this rule. The aforementioned classics, like the Hermes Birkin (above) and Chanel flap bags, will fetch an attractive price at almost any given time.