Wednesday, April 19, 2017

Investment Bags


While I personally don't purchase "investment bags" since to me it's like shopping with other people's tastes in mind and implies that you should barely use your bag to minimize any signs of wear. Aesthetically, I'm a tacky person with no taste and hate to spend money to have the same XYZ as other people, so I'm not into some of the classic investment bags, and financially, as Archana wisely said: "I could buy it but couldn’t afford it," and many other life in general reasons. And also "investment bags" can also be construed as a gimmick to convince people to buy luxury goods because of the perception that a high price denotes a better quality.

But, let's talk about a hypothetical luxury consumer. Let's say she purchases luxury bags fairly regularly, about 2 a year. A bag from the likes of Gucci, Chloe, Saint Laurent, etc... usually costs around $1,500 - $3,000 ($3,000- $6,000/year). I completely agree with Joanna Logic vs Luxury that history has shown that bags from these brands that were once all the rage have long since fizzled out: YSL Muse, Fendi Spy, Chloe Padington, etc..., that today they have resale values far less $500. So, if she is looking for longevity and knows that her tastes will change with the season, her money is better "invested" in 1 bag a year from the 2 maisons: Hermes and Chanel. Vuitton can be tricky and I give honorable mention to Bottega Veneta*.

Now, an Hermes Birkin or Kelly is long beyond the stratosphere of bags in this price range. But a quick perusal of TRR shows some Kelly-s just around $6,000. According to the prices here, Chanel MSRPs will also completely jump out of this range in another 1-2 years, so there is again the pre-owned market. There have been analysis showing that the classic styles from Hermes (here) and Chanel (here) have (notoriously) increased in price over the years. So she can be more confident that a classic Kelly or 2.55 will not only hold but potentially increase in value if she decides to cash out her bags let's say after 5 or so years.

Anyway, these are just my vague opinions and aren't grounded in any scientific research on my part. But I found Joanna's video on the topic thoughtful and dare I say intelligent (intelligent as we can be blabbing on about bags right?).

-

What are your thoughts on investment vs. luxury bags?



*while I don't think their classic intrecciatos--will increase in value, the values hold fairly steady that they won't be worthless in five-ten years times. Also, I'm not super familiar with luxury brand pricing, but I don't recall BV as one of the brands notorious for price hikes (ie. Chanel/Hermes).

12 comments:

  1. I've never been a bag person, but I completely agree that the only "investments" would be the Chanel 2.55 or Hermes Birkin or Kelly simply because of the resale values. Everything else seems a gimmick to sell to people aspiring to be something or someone. I hate that the word investment is associated with clothing and accessories because investments are supposed to increase in value over time...or at least have the chance to.

    It reminds me of something my dad always used to tell me - "if it's on your ass, it's not an asset."

    ReplyDelete
    Replies
    1. Sometimes I think to myself if cosmetic modifications are considered "investments." But as someone I won't name said, "I had surgery and so what? I still married the same stupid man." LOL!!!!

      Delete
  2. "1 bag a year from the 2 maisons: Hermes and Chanel. Vuitton can be tricky and I give honorable mention to Bottega Veneta*." - I love this!! YSL, Balenciaga, Chloe, Mulberry, Philip Lim - so many bags have come and gone. Don't get me started on Fendi Baguettes. I did not understand their appeal even before 2010. Maybe I am not sophisticated enough to see their appeal :)

    Sometimes, I wish fashion houses could just have under 5-6 versatile styles at any given time - maybe fine tune those and not come with a new style unless they want to do away with one of the existing designs.

    I know I can only buy one bag this year. So, YSL Universite Bag, Celine Box Bag and some other bags that tempt me will still not make me part with my money this year. It will either have to be a Chanel or a Hermes. I lovvvveee that I still can find a few Kellys around the 6K mark on the pre-owned market! But, who knows? 20 years down the line my future daughter may think the 2.55 or Kelly is so dated!

    In any case, I hope to have all the bags I need and love in the next five years (again less than 5) and just not look at the handbag market at all for a loooonggg while! Wishful Thinking :)

    ReplyDelete
    Replies
    1. I use the come and gone factor to my favor because my aesthetic preferences lean towards designs from the 2000s so all my luxury bags are pre-owned and long since discontinued, which equals low resale value.

      For those that enjoy luxury goods but don’t want to ascend to the tier of Hermes and Chanel, virtually every designer brand produces their version of the iconic styles (Birkin/Kelly, 2.55, Neverfull, Speedy, Jackie/Trim). The Fendi Baguette looks like their answer to 2.55. Aesthetically speaking some of these alternatives will hold up through time—in my opinion—it’s the ones with less embellishments, straighter lines, and darker neutral colors. But then if a brand makes their bags too plain, would the interest be there? It’s a tricky thing. So I think just buy what you like and don’t stamp your initials on them!

      Delete
  3. I think anyone who's ever tried to re-sell luxury items can tell you the term 'investment' here is mis-used. Unless it's a limited edition collectible or something (and even then it's not always the case), the value of the bag decreases as soon as you walk out of the store with it, like a car, and you will veryf rarely recoup your $$$ if you try to sell it, and that's the exact opposite of an investment! I too can never stick with a style, even if it's just hypothetical. I'll want whatver nice bag is in style then the next season I'm over it, lol.

    ReplyDelete
    Replies
    1. Yah it's all just speculative and wishful thinking about being able to sell things down the line. I'd love to see your bag collection!

      Delete
  4. Haha! I agree with all of this. Prrsonally I love bags with very little embelishments and sleek lines. Maybe that makes me boring! Your ligic actually holds up for so many bags. For instance, Givenchy Antigona

    ReplyDelete
    Replies
    1. And ironically almost all my bags are statement bags! But I have a collector mentality vs. investor mentality. There's really no exact science or right and wrong to it. It can depend on if a bag was an overexposed IT item, because seeing it “after its time” looks dated.

      Delete
  5. Depends on what else you do with your money.

    For short term, I dont know if selling a bag on pre-loved websites that take 10% commission will give better returns than a high interest savings fund. Mid term/long term, I can see the appeal.

    I do stock market and real estate. I rather keep sending my earnings there than put into fashion for now.

    I believe investment purchases are supposed to mean buy once so that you dont have to buy the same item over and over again when they wear out. That meant spend on quality. Luxury purchases are more about art, pleasure and exclusivity maybe ? But if they are supposed to literally mean 'you can make money from them later in time', the birkin somehow makes sense.

    If I were to collect fashion to auction later, it would be Raf Simons originals, vintage yohji and garments designed by Margiela. If I had money just sitting in my savings, I dont mind having it sit in my closet as a brikin instead too. But selling is too much of a hassle for fashion items. Its easier for me to do tech stock. I follow the companies doing well in AI and put my money there.

    ReplyDelete
    Replies
    1. Yup, I agree and the video shows as well that bag investments are not a substitute to actual financial investments. It's really more about making a case for longevity of fashion items whether this is for aesthetic or resale reasons. If someone was in dire straits would they say "Thank goodness I 'invested' in all these Chanel bags" or rather that they had money in the bank/mutual funds/real estate. And financial investments are less prone to moths and mold. I think of the movie Blue Jasmine where she couldn't sell her Vuitton luggage because she had it monogrammed and her luxury diamonds didn't resell for what they cost. I know it's a movie, but still...

      I like your definition of investment purchases meaning to spend more on quality items. Before "MINIMALISM" it was about "Buying the best quality you can afford." And luxury items are more about their extrinsic value.

      Delete
  6. OK, trying to post this comment once again as the previous one didn't show.
    I'm fascinated by the fact that the term "investment" and similar ones gained such a popularity in fashion blogosphere. A lot of people show their investment pieces that are far from (good) investment given the circumstances you mention in your article (most things that are now on trend are sold for a fraction of their original price just few years later, etc.; and that the moment you walk out of the store with a purchased item, that item automatically loses about 30 - 50% of its price) and the fact that they even don't make a good wear from it since they come up every day with new thing to be "obsessed with" that will surely make a "wardrobe staple"...

    ReplyDelete
    Replies
    1. I can't remember exactly but I'm wondering if "investment bags/dressing/etc..." was coined either during or after the recession in the US. It's true that there is always a new "must have" hence the best "investments" are ones where the design has remained consistent over time: Bottega, Chanel, Hermes, Vuitton. Brands like Dior, Prada, Chloe, Gucci, Celine, YSL/Saint Laurent tend to change their designs seasonally or by their ever-changing creative directors.

      Delete

Thank you for stopping by!