Designer handbags worth the investment, from Hermes to Chanel

As prices of the most coveted luxury bags skyrocket, The National explores what to look out for when making an extravagant purchase

Grace Kelly carrying her namesake bag, the highly coveted Hermes Kelly. Getty Images

There are some designer handbags that never go out of fashion. The Hermes Kelly and Birkin bags, the Chanel 2.55, or the Louis Vuitton Neverfull immediately come to mind. As relevant now as they were in the 2000s, 1990s or even earlier, these timeless pieces are often passed down from generation to generation. But for collectors, the true magic of timeless accessories such as these is their ability to hold their market value, making them as much of a worthy investment as stocks and shares, jewellery, or even art.

In the past few years, prices of timeless luxury bags have skyrocketed. According to the Art Market Research 2020 Luxury Handbag Report, they outperform classic cars and art as potential investments. A few notable key players are leading the growing valuation movement, with the likes of Chanel, Hermes and Louis Vuitton seeing a significant price increase on both new and second bags in the past 10 years.

According to the report, such brands have experienced an average valuation increase of 83 per cent in the last decade. But how, you may ask, can a fashion commodity be worthy of such a price increase? And what truly makes the demand for luxury bags conceivable?

A black matte alligator Hermes Birkin, on auction with Sotheby's for an estimated €120,000 to €150,000. Photo: Sotheby's

“In general, the harder a bag is to get hold of, the more likely it is to increase in value,” Aurelie Vassy, associate specialist, handbags and accessories at Sotheby’s, tells Luxury. This could be because it is part of a limited-edition collection, a design that is no longer in production, or perhaps it is fashioned from a rare material such as crocodile skin, ostrich or rare fur.

Today, there are years-long waiting lists for Hermes and even Chanel bags, and it seems the longer the waiting list, the more coveted the bag becomes. For those that can afford the top-end luxury bags, it is a win-win situation – prices go up, which ultimately increases the resale value, making it money spent well.

Once purchased from the stores, many of these bags end up being re-sold at auctions, offering collectors a chance to get their hands on bags that are out of production. Vassy explains that the auction market is dominated by one particular brand: “In the auction market, the French brand Hermes really gets all the attention. There is no comparison. It’s due to the scarcity and high quality of these bags’ craftsmanship, which leads to increasing demand. The most popular bags are the Kelly and the Birkin, with limited-edition bags being the most in demand.”

The Hermes Himalaya Niloticus crocodile Kelly sold for a record-breaking $353,400 at Sotheby’s Paris. Photo: Sotheby's

Bags can typically sell for anywhere from $5,000 up to hundreds of thousands at auction. Last year, Sotheby’s sold the Himalaya Retourne Kelly 25 for €352,800 ($353,400) at a Paris auction, making it the most expensive bag ever sold at auction in Europe or the US. “This one was really special,” adds Vassy. “I think that the bags produced by this brand will remain timeless. When you buy a Hermes bag, you have to think about your lifetime – your daughters and granddaughters, and these pieces will stay in the family forever.”

The second-hand market is booming, even in the Middle East, where buying used bags was previously uncommon. In 2021, Alyssa Mariano cofounded Bazaara, a UAE-established community marketplace app for buying and selling preloved fashion and accessories. With handbags one of the major pillars, she believes it’s worth taking the plunge when buying an expensive piece.

A quilted clutch shown as part of the Chanel Metiers d'Art 2023 collection. Photo: Chanel

“Investment pieces are always worth the value if you invest properly. Doing your research on which bags have limited production and high popularity and which handbags have consistently demonstrated their value over time can help when deciding which brand and bag to invest in. And, with the increasing popularity of vintage and preloved pieces, now more than ever is a great time to invest in a handbag,” she says.

Again, she believes brands such as Chanel, Hermes and even Prada are leading the way, with smaller brands that make limited quantities, such as Telfar and Goyard, trailing closely behind. “With the increasing number of resale platforms and increasing popularity in vintage pieces, now is a great time to get involved in buying and selling second-hand. It’s not only an investment, it’s also environmentally friendly,” she adds.

Likewise, Emily Abraham, co-founder of Love Luxury, which has an online resale platform and a physical store in London’s Knightsbridge, agrees. “It’s a way of investing your money outside of the bank, just as people invest in gold or stocks and shares. Hermes was actually proven to offer the best return on investment in 2022 and has continued to do so in 2023. The market is a much safer and lucrative way of investing over any other assets or financial services,” she says.

Margot Robbie wears a black Chanel 2.55 flap bag at the 2023 Cruise presentation in Los Angeles. Photo: Chanel

On the resale market in the Middle East specifically, Abraham says: “The Middle East market is very top heavy. The demographic here appreciates exclusivity and extreme luxury; exotic skins are greatly in demand in Dubai; we receive several requests for exotic skins such as crocodile and ostrich, whereas in London, they don’t have such appeal. Limited-edition models are also hugely sought after over here, more so than in the UK where the average customer would generally opt for a classic design.”

So, what should you look out for if you are thinking of buying a handbag as an investment piece? The top brands especially are not expected to see a plateau in pricing any time soon, but there are also some newcomers to the spotlight, and much like having your eye on the ball when it comes to investments in other sectors, it’s the same with fashion accessories. Being an early adopter of a certain style or shape could put you ahead of the trend, but there is a certain amount of risk involved.

“The first thing that buyers should look for is a third-party authentication certificate. I wouldn’t recommend buying without one,” says Abraham. “Ideally, you want to purchase a full set, including all original packaging and receipt. This will ensure you are able to sell for the maximum price; a full set heavily influences the resale value. Stay away from trends when possible for investment purposes, and go for classic styles and colours.”