More people investing thousands in luxury handbags

Global Business

When shopping, many people like to justify their purchases by saying it is quote an “investment.”

It rarely is. But when it comes to handbags, some brands truly do increase in value over time and offer a great investment opportunity. CGTN’s Karina Huber reports.

More people investing thousands in luxury handbags

More people investing thousands in luxury handbags

When shopping, many people like to justify their purchases by saying it is quote an “investment.” It rarely is. But when it comes to handbags, some brands truly do increase in value over time and offer a great investment opportunity. CGTN’s Karina Huber reports.
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Ina’s – a luxury consignment shop in the heart of Manhattan. The business was started 25 years ago by Ina Bernstein. There are now five Ina boutiques in the city.

Part of what’s helped the business grow is its collection of handbags. And they sell quickly. Chanel bags, which Ina offers for around $4,000, are often gone a day after they arrive.

Demand for certain designer handbags is so fierce that auction houses like Christies have gotten into the game. And which brand is the world most coveted without a doubt Hermes. Roughly 90 percent of what’s up for sale at this auction is made by the French label.

The top lot is crocodile skin Hermes Himalayan. The asking price: $70,000 to $90,000. A larger version broke a record earlier this year selling in Hong Kong for $300,000.

“Hermes is unlike any other brand in terms of the secondary market being actually stronger than the primary because they’re almost impossible to get in the primary market,” Caitlin Donovan, Accessories Specialist, Christie’s said.

You have to be a long-standing customer of Hermes to even be given the chance to buy a Birkin and there’s still a waiting list.

Michelle Goad, who runs a personal shopping business, said clients that want a Birkin now have to go to the secondary market and be prepared to pay double the store price. Those returns have sparked a whole cottage industry of people flipping Birkins for profit.

“There’s a woman that we work with that has made her whole entire business out of this. It’s pretty extraordinary. She left finance to go sell Birkin bags,” Michelle Goad, CEO for PS Department, said.

A recent study shows over the past 35 years, the annual return on Birkin bags averaged 14 percent – outperforming the S&P 500 and the price of gold. Sounds like a solid investment but good luck getting your hands on one.


Oliver Williams on alternative investments in China

The Birkin bag is boding well for investors. And now, twice this year the purse style broke its previous record for most-expensive handbag sold. And some experts are expecting 2017 to be a smart year for investors of the Birkin bag, as 2016 saw an average annual return of 14.2 percent compared to the Standard & Poor 500 of a nominal 11.66 percent. The fashion house will be scaling back production of the bag to preserve its second-hand value and exclusivity through 2017. For more on these types of alternate investments, CGTN’s Rachelle Akuffo spoke to Oliver Williams, an analyst with WealthInsight.