Can a handbag be a good investment? An expert deciphers why and how

Some iconic bags from the houses of Hermès, Chanel and Louis Vuitton have a reputation for being more profitable than gold or stones. Myth or reality? While a Kelly has just sold for €352,800 in Paris, Alice Léger, luxury fashion and accessories specialist at French auction house Artcurial, sheds some light.

As climatic, political and economic crises accumulate, is it better to invest in gold, in stones or… in handbags? This is the (f)useful question that we can ask ourselves in light of a recent record purchase in Paris: At Sotheby’s, an Hermès handbag in crocodile skin was snapped up for €352,800 on September 29, 2022. C This is the highest sum brought in by a luxury bag in the history of this auction house. It was a Kelly 25 (number referring to its size in centimeters) Himalayan (so called white crocodile skins), originally estimated between €100,000 and €130,000 by Sotheby’s.

And if this sum can already make you dizzy, it seems almost small compared to a record sale at Christie’s: a Kelly Himalaya 28 from Hermès, sold for four million Hong Kong dollars, i.e. €524,000 in November 2021. This turned out to be encrusted with diamonds level with the metalwork and its padlock.

But how can handbags reach such sums? Can other pieces of luxury leather goods be used as an investment to achieve incredible capital gains? Can we find treasure in our grandparents’ closets to sell fortunes at auction? Alice Léger, head of Hermès sales in the luxury fashion and accessories department at French auction house Artcurial, sheds some light.

Interview with Alice Léger, Hermès specialist at Artcurial

Instagram screenshot by Alice Léger.

Miss. Are you surprised at the price this Kelly 25 Himalaya handbag sold for?

Alice Leger. Yes and no. It’s no wonder, because it’s a highly sought-after piece, extremely rare. And since tiny bags have been all the rage in recent years, size 25 has proven to be even more desirable. Where I am more surprised is the size of the amount. This record for a handbag at Sotheby’s rivals Christie’s, where it was loaded with diamonds, further explaining the price. That’s the game of auctions.

Why are the Kelly and Birkin bags from Hermès so sought after?

Because they are iconic models and very complicated to get hold of at Hermès. Production is very limited, which affects the resale market: the rarer it is, the more expensive it is. We feel it strongly in the middle of second hand and auctions. These are models that are sought after across generations and on all continents, constantly reinvented by Hermès through new sets of colors and materials, to always stay up to date.

Hermès’ status as a French luxury house also plays a significant role in the desire for these products. The quality is in a special class, and far above other luxury homes.

Unlike a car that loses value as soon as you leave the garage after buying it, is it true that Kelly and Birkin from Hermès increase in value right after being bought in a store?

Once purchased in the store, the Kelly and Birkin models do not lose value, provided you take care of them, protect them from the ravages of time, wear, moisture, etc. They may even gain in value in some cases, yes. So much so that the Hermès market turns out to be extremely speculative in second hand. It is a niche market.

For this, it is necessary to respect certain criteria, such as the fashion of the time. If you buy a size 40 Birkin now, you risk making less money selling it on tomorrow, because the trend, for example, is towards small bags at the moment. But we can wait for the fashion to turn, return to large bags, and then realize a significant added value. And regardless of color, it is above all the state at resale that matters.

Is every luxury bag necessarily an investment that can increase in value over time?

At present, on the side of luxury houses in general, it is above all leather goods Hermes which is sold for more on the second market than in the store. Chanel has raised prices sharply in recent years, which will certainly have an impact on the resale market. Some limited editions of Louis Vuitton and collaborations with major artists can sometimes make it possible to make a capital gain, especially if they are resold soon after their release.

At present, these are the three houses where one can have the best chance of getting a return on investment, even a capital gain, by reselling their most emblematic models of handbags. For example, the price of Constance models from Hermès has increased gradually over several years: they are now resold at the same price as they are bought new in stores.

Screenshot 2022-10-07 at  12.16.00
A Constance model from Hermès. © Instagram screenshot.

How to recognize a handbag model that will increase in value over time?

It all depends on the purchase you want to make. If it’s a bag you want to carry, buy something up to date. Currently quite small formats. Color-wise, there are no shades that are going to outsell another, although pink and green are very popular these days. It is especially important to be aware of the bag’s condition and the newer it is, the more expensive it will (re)sell.

For example, while Jean-Paul Gaultier was artistic director of Hermès [de 2004 à 2010, ndrl]he released a “So Black” compilation [caractérisé par une métallerie noire, ton sur ton avec le reste du sac en cuir noir]. This collection is still available today at exorbitant prices. Thereby, in July 2021 we sold a Birkin So Black in black alligator, size 30, €115,000. It remains to this day the record for sales of leather goods at Artcurial..

And if you find a luxury bag at a flea market or a grandparent’s closet, where can you get it authenticated and appraised to assess its value?

Few houses agree to authenticate a bag, and their policies may change over time, so there are no general rules, it is case by case. You can send it in for restoration/repair at the brand, who will no doubt inform you whether it is a fake (if so, they may offer to destroy it) or not. Other things, if it is a bag branded by major houses, you can approach an auction house who can arrange to authenticate it and assess its current market value. For example, Hermès tends to refer clients to us for this very authentication work. This is not their seller’s job (but their craftsmen can do this if a bag is sent for repair/restoration).

What advice would you give to someone who wants to buy a used luxury bag and make a “good investment”?

I advise against buying high value bags on sites like Vinted or LeBonCoin. It is imperative that there is an authentication service worthy of the name upstream of the sale. It’s protection in the buyer’s interest, in my opinion. Especially since fewer and fewer people keep their bills, and a well-made fake [surnommée « superfake » dans le jargon, ndlr] can replace a real bag with the papers.

Do not hesitate to push the door of auction houses, which also offer more and more online sales, much less intimidating than in theaters. For example, at Artcurial, from November 3 to 9, 2022, we are offering a Hermès Vintage Sale: Fashion, Jewelry, Lifestyle, Leather Goods. There is a large selection of vintage Kellys, around €2,000, and vintage Birkin, around €6,000. There will also be less iconic models but at more attractive prices that are worth checking out. To bid simply register on the website, it’s free. And we can come across priceless nuggets of gold.

Also read:

The thong boots from the Miu Miu show, an absolute fashion paradox?

Header image: Christie’s; Instagram screenshot.

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