Traditional investments typically come in the form of gold, bonds, or stocks. However, in 2022 you can look towards acquiring a luxury handbag for your next financial investment. The Knight Frank Luxury Investment Index reported that handbags were the most collectible investment in 2019, with a 13% growth in value. Research suggests the world-renowned Hermès Birkin is the luxury bag of choice, but there are plenty of other options too if you’re looking to invest in the luxury handbag market. Here is everything you need to know.
The Growth of The Hermès Birkin
First designed, and released in 1981, the Hermès Birkin has become the luxury bag of choice amongst the global rich and famous. Each bag is handcrafted from a single piece of the highest quality leather, with exquisite inishing touches. If you are looking for a safe, and worthwhile investment the Hermès Birkin is the one to go for.
In the 35 years prior to 2016 the average annual return on a Hermès Birkin was 14.2%. Outpacing the S&P 500, at 8.7% and the price of gold at -1.5%. Source: Time Magazine, 2016.
Since 2016 the Hermès Birkin has stayed on track, and in 2019 it saw a 13% increase in value. The trend is set to continue as demand for the bag increases even further.
Supply, Demand and Hermès Scarcity.
It is thought that there are only 200,000 Hermès bags in circulation around the world, with an estimated 12,000 handcrafted on an annual basis. This scarcity is what gives a Hermès bag its price tag, and what makes owning one so desirable.
With demand completely outweighing supply of the Hermès Birkin, you’ll have to know where to look to get your hands on one. Without a relationship with a Hermès sales associate, it’s practically impossible to purchase a new model. To start with, you’ll have to spend a lot of money with Hermès to impress a sales associate enough to give you a call, and even then it’s likely you’ll have to be added onto a long wait list for a new Birkin. But investing in a pre-owned Hermès Birkin is a great place to start and will take less time than waiting for the call to say new Birkin is available.
What About Other Luxury Brands?
If you aren’t looking to invest in a Hermès Birkin right now the Chanel Classic Flap Bag, Dior Saddle Bag or the Louis Vuitton Neverfull all make for an ideal financial investment in 2022. When looking to invest in a luxury bag, choose one that will never go out of style, long term trends are what helps a luxury bag to increase in value. Luxury bags that are a timeless style are more likely to still be desirable in the future, so consider this when researching your purchase.
How to Get the Most From Your Investment.
The key to ensuring that you get a return back on your investment is condition. Of course, you will want to make the most out of your new luxury bag, but to make back, or profit on your purchase, your bag will have to be in pristine condition. You should look to choose a bag that fits in with your lifestyle but will also be in a good enough condition to be sold on the market when the time is right.
So, should a Hermès Birkin be your 2022 investment? Well, the research definitely shows that you’re very likely to see a return on your investment if you buy one. But before you jump into the world of luxury handbags and look to spend the minimum $15,000 you’ll need for a Hermès Birkin, it’s best to seek professional financial advice for additional support on your investment. If you get your initial investment right, it’ll benefit you in just a few short years.
(Disclaimer: This is not a financial advice. Please use our articles to educate yourself on luxury handbags but not as a sole factor to influence you to blindly jump into buying any bag.)