After reading last week’s blog about collectible items, you may be digging through your closet to see what might be worthwhile. Own luxury handbags – Hermes, Chanel, Prada or Louis Vuitton, to name a few? Count those in.
If you own luxury handbags that are valued at $1,000 or more and has the potential to retain or increase their value in the long run, consider including it in your net worth statement.
Take the Birkin bag from Hermès for example. There are only 200,000 Birkins available on the market, a challenge for the long waitlist (each individual bag takes 48 hours to create). The most expensive Birkin bag in history sold at auction for a whopping $380,000. Studies have shown that rare Birkin handbags have averaged an annual return of 14.2% over the past several decades.
According to McKinsey research, global digital sales for women’s luxury fashion are expected to increase from 3% of the total market to 17% worth $12 billion in 2018. Despite overall market growth, some designers have anchored sales down by lowering prices across their assortment (i.e., apparel, accessories, shoes, etc.) or flooding department stores with discounted items.
Whether you’re the experienced luxury handbag collector or about to make your first purchase, consider these factors first.
CERTAIN BRANDS STAND THE TEST OF TIME.
According to this sales analysis from Tradesy, an online luxury resale consignment shop, certain brands are always in high demand. They found that Chanel, Hermes and Goyard typically retain the value stated at retail price.
SOME BRANDS NEVER SETTLE – OR GO ON SALE.
Don’t wait around for seasonal discounts or Black Friday deals. Some designer brands maintain their luxury status by following a vertical integration business model, which keeps manufacturing and production costs in-house. These brands do not resell at discounted prices or offer wholesale distribution to third party retailers.
Which brands never go on sale? Chanel, Christian Dior, Goyard, Gucci, Hermès, Louis Vuitton, Prada and Vera Wang.
WATCH OUT FOR COUNTERFEITS.
Unfortunately, many shoppers fall victim to purchasing counterfeit designer brands every year. The most popular culprit? Louis Vuitton. The company spends more than $17 million each year fighting product fraud. Beyond the logo, which is often the easiest to replicate, shoppers and collectors should keep very close eye on the stitching and quality of fabric or leather.
THE BOTTOM LINE:
Luxury handbags have the potential to grow your personal wealth; consider adding as part of your net worth statement. Just make sure they are the real deal: when possible, try to purchase directly from the brand and watch out for counterfeits.