Why designer handbags are worth investing in

Property, classic cars, fine art… these are perhaps some of the things you might be more used to considering as an investment. Not handbags. Even for those who have successfully gained a return on investment in less traditional asset classes such as whisky, wine and sports memorabilia, handbags might, at the outset, seem a leftfield choice.

Those more familiar with the world of vintage and designer handbags, however, will know that Hermès Birkin handbags have increased in value by 500% since 1981, at an average annual increase of 14.2% - as reported in this 2016 study. This amounts to a return on investment greater than that of gold during the same period. A 2020 report from Art Market Research found that handbag values at auction had risen by 42% over the previous year (2019), surpassing the art category as a whole, and even outperforming the works of Banksy, which had risen by 23% over the same period. Demand continued to rise even during lockdown.

Perhaps the best-known premium handbag models are the Hermès Birkin and Kelly models. Their value is driven partly by scarcity: the production is limited, and these are typically only available to long-term customers who have joined a waiting list. Premium models made from rare materials are even more exclusive. The Kelly Rose Gold, for instance, was made from solid rose gold and contains 1,160 diamonds and retailed for an astonishing 2 million US dollars.

But that’s not the most expensive model available. The Mouawad 1001 Nights Diamond Purse holds the Guinness World Record for the most expensive handbag since 2011 and is valued at 3.8 million US dollars. The high price largely comes from the bag’s sheer artistry, with thousands of diamonds set within it and 8,800 hours going into its construction.

While a handbag worth a seven-figure sum might be the exception rather than the norm, it is not uncommon for designer handbags to reach six figure sums. In July 2021, a Hermès Birkin sold for £119,000 at auction in Bonham’s. This particular version’s value was bolstered by its heritage, having belonged to the Jane Birkin, the singer, actress and model after whom the bag is named. This was proven by a letter from the star herself, as well as by the fact that ‘Jane Birkin’ was written in Tippex inside the bag. Just as with other asset classes, the heritage and story behind an individual item can raise its perceived value considerably. Other Birkin models that have eclipsed the £100,000 mark are made from luxury leather, including crocodile skin.

Traditionally the ‘holy trinity’ of valuable designer handbags is made up of Hermès, Louis Vuitton and Chanel. If you’re looking to kickstart your own collection of designer handbags, a good way of gauging value is to consider the scarcity of an item (the rarer it is the more valuable it is likely to be), the uniqueness (a quirky or eye-catching model could be worth more than a more typical model) and the heritage (did it belong to someone noteworthy?).

As with any high value item or collection, make sure you have the appropriate insurance for your designer handbags. Chubb valuables articles cover provides worldwide protection against loss or damage and will automatically cover you for up to £500,000 for any newly acquired handbags, so long as cover is requested within 90 days of purchase.