Alternative investments: Luxury designer bags
A common perception that many people often have about luxury handbags is that they are simply frivolous purchases made by the rich and famous.
But that mentality is slowly changing, as discerning bag collectors are proving that luxurious designer handbags are no longer just a statement fashion accessory, a senseless arm candy, or simply the preserve of the wealthy; in fact, a good choice of bag can lead to excellent returns in the long run.
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| Hermès Birkin |
A rare Hermès Birkin recently set a world record for fetching the highest price - an exorbitant amount - for a handbag at an auction.
The red crocodile skin purse, with white gold and diamond hardware, was sold to an anonymous bidder for a whopping US$203,150 at the Heritage Auctions in Dallas, Texas.
The final price far exceeds expectations, given that it had been expected to fetch around US$80,000.
But it was not the only Hermès piece to have generated such attention.
A blue crocodile version with palladium hardware sold for US$113,525, a shiny red crocodile Birkin with palladium hardware went for US$95,600 and a Himalayan crocodile Birkin with palladium hardware fetched US$80,663.
Matt Rubinger, director of luxury accessories at Heritage Auctions explains the demand. "Most of the bags were originally bought by collectors who never used them, or only used them once. And these exclusive handbags actually increase in value over time. If you walked into Hermès today you couldn't get these bags - not even if you were Oprah Winfrey."
"Hermes bags appreciate the moment you buy them; the really tried and true pieces hold and increase their value over time. There's definitely a huge market for these pieces," he told The Wall Street Journal.
Apparently, it is not just Hermès who is enjoying such exclusivity and prestige; other renowned fashion brands are also enjoying equal success.
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| Chanel 2.55 |
On average, Chanel increases its prices from 8-12 percent per annum, which simply means that a Chanel 2.55 that you buy today could potentially increase in value by over 30 percent in just a short time frame of three to four years - depending on how well you maintain and care for the bag.
High-profile socialite and avid bag collector Ms Sulian Tan-Wijaya, who owns a highly coveted collection of the classic Chanel 2.55 in different versions and sizes, a prized collection of Fendi Baguettes and the Louis Vuitton Mirror collection in gold, shares her opinions on why selected luxury designer handbags appreciate in value over the years.
"Both the Chanel 2.55 and Hermes Birkin are all-time classics. They transcend age and fashion trends, and can be worn with almost all kinds of outfits, from casual jeans and T-shirts to corporate work attire. They are no different from the timeless Rolex or the Cartier Love bracelet. Both have appreciated substantially over the years. A Chanel used to cost me only SGD$2,000 each during my younger days, but the same bag can now fetch over SGD$6,000."
"As such, I now treat my bags as a form of investment. In fact, some of the bags that I bought a very long time ago have since remained in their dust bags."
When asked to share what are some of the factors that budding bag collectors have to look out for before making the big-ticket purchase, she said: "The brand, design, model and material. For example, the Chanel 2.55 in black calfskin leather has retained the exact design and material all these years and it matches any fashion from any era so effortlessly. That said, try to stick to materials that feature dark colours as they are easier to clean and do not stain."
If you are keen to hop on the bandwagon, but not sure which bag to buy, Sulian recommends that you invest in a truly timeless piece.
"Go for something classic, which you can wear long after you have purchased it. Stick to proven brands like Hermes and Chanel, which significantly appreciate in value with time."
