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

Some iconic bags from the houses of Hermès, Chanel and Louis Vuitton are reputed to be more profitable than gold or stone. Myth or Reality? While a Kelly just sold for €352,800 in Paris, Alice Léger, luxury fashion and accessories specialist at French auction house Artcurial, sheds some light.

As climate, political, and economic crises pile up, is it better to invest in gold, stone, or… wallets? This is the (f)useful question we can ask ourselves in the face of a recent record acquisition in Paris: at Sotheby’s, a crocodile-skin Hermès bag swindled out of €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 that refers to its size in centimeters) Himalayas (as white crocodile skins are called), initially 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 by Hermès, sold for four million Hong Kong dollars, that is, almost €524,000, in November 2021. This one turned out to be encrusted with diamonds at the level of the goldsmith’s and its padlock.

But how can handbags reach such sums? Can other pieces of luxury leather goods be used as an investment for incredible capital gains? Can we find treasures in our grandparents’ closets to sell fortunes at auction? Alice Léger, Hermès sales director 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 of Alice Léger.

Miss. Are you surprised by the price at which this Kelly 25 Himalaya bag was sold?

Alicia Leger. Yes and no. It is not surprising, because it is a highly sought after piece, extremely rare. And since tiny bags have been all the rage in recent years, the size 25 is proving to be even more coveted. Where I am most surprised is the height of the quantity. This record for a bag at Sotheby’s rivals that at Christie’s, where it was encrusted with diamonds, further explaining its price. It’s the auction game.

Why are Hermès Kelly and Birkin bags so coveted?

Because they are iconic models and very difficult to find at Hermès. Production is very limited, which affects the resale market: the rarer, the more expensive. We feel it strongly in the midst of second hand and auctions. These are models coveted across generations and on all continents, constantly reinvented by Hermès through new sets of colors and materials, to always be up to date.

Hermès’ status as a French luxury house also plays a role in the desire for these products. The quality is second to none and far above other luxury homes.

Unlike a car that loses value as soon as it comes out of the garage after you buy it, is it true that Hermès Kellys and Birkins gain value as soon as you buy them in a store?

Once bought in the store, the Kelly and Birkin models do not lose value, as long as you take care of them, protect them from the ravages of time, wear, humidity, etc. They can even gain value in some cases, yes. So much so that the Hermès market is extremely speculative on second-hand. It is a niche market.

For this, it is necessary to respect certain criteria, such as the fashions of the time. If you buy a size 40 Birkin now, you risk making less profit if you resell it tomorrow, because the trend is towards smaller bags right now, for example. But we can wait for fashion to change, return to big bags, and then we get significant added value. Y whatever the color, what matters is above all the resale status.

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

Currently, on the side of luxury houses in general, it is above all leather goods. Hermes which is sold more in the second market than in the store. chanel has been increasing its prices sharply in recent years, which will surely affect the resale market. Some limited editions of Louis Vuitton and collaborating with big artists can sometimes make it possible to make a capital gain, especially if they are resold soon after release.

Currently, these are the three houses with which you can have the best chance of making the investment profitable, including capital gains, by reselling their most emblematic bag models. For example, the cost of Hermès Constance models has been gradually increasing for several years: they are now resold at the same price as bought new in stores.

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

How to recognize a bag 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 take, you have to buy something daily. At the moment, rather small formats. In terms of color, there are no shades that outsell others, although pink and green are very popular these days. It is especially important to pay attention to the condition of the bag and the more recent it is, the more expensive it will be (re)sold.

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

And if you find a luxury bag at a flea market or in a grandparent’s closet, where can you authenticate and appraise it to determine its value?

Few houses accept to authenticate a bag and their policies can change over time, so there are no general rules, it is case by case. You can send it in for refurbishment/repair with the brand, which will likely tell you if it’s a fake (in which case you might offer to destroy it) or not. Other, if it is a bag marked with large houses, you can go to an auction house that is responsible for authenticating it and appraising its current market value. For example, Hermès tends to refer clients to us for precisely this authentication job. This is not your seller’s job (but your craftsmen can do it if a bag is sent in for repair/restoration).

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

I do not advise buying high value bags from sites like Vinted or LeBonCoin. It is absolutely necessary that an authentication service worthy of the name exists before the sale.. It is protection in the interests of the buyer, in my opinion. Especially since fewer and fewer people keep their bills, and a well-done forgery [surnommée « superfake » dans le jargon, ndlr] you can replace a real bag with the papers.

Do not hesitate to push the door of the auction houses, which also offer more and more sales online, much less intimidating than in theaters. For example, at Artcurial, from November 3 to 9, 2022, we offer a Hermès Vintage sale: fashion, jewelry, lifestyle, leather goods. There is a great selection of vintage Kellys, around €2,000, and vintage Birkins, around €6,000. There will also be less iconic models, but at more attractive prices that are worth taking a look at. To bid, simply register on the website, it’s free. And we may come across priceless nuggets.

Also read:

The strappy boots at the Miu Miu show, an absolute fashion paradox?

Headline photo credit: Christie’s; Instagram screenshot.

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