Bay Area Fashionista

Handbags from top left: Chanel Boy Bag (risky, new asset-may or may not mature over time) / Chanel classic flap bag (blue chip handbag investment, should mature slowly over time) / Chanel 2.55 shoulder bag (blue chip handbag investment, should mature slowly over time) / Mansur Gavriel drawstring bag (current IT bag selling over list price in the secondary market, good for day trading and short term investing)

Have you ever looked at a premium, luxury handbag and wondered if it was worth the money? Have you heard your friends, or acquaintances, talk about what a great investment a recent handbag purchase had been? You are not alone.

With the IT bag trend around the globe encompassing handbags which cost north of $1000; sometimes way more, it is no wonder that handbags can be considered an investment. Let’s look at the Hermes Birkin as an example:

An Hermes Birkin is considered the ultimate IT bag. This beautiful tote is also considered by many handbag lovers to be the “Holy Grail” handbag. This means many handbag fans goal in life is to own an Hermes Birkin. Crazy you say? Perhaps, and perhaps not. . .

The Hermes Birkin will set you back around $20,000; or more. This is not a small amount of money. If you had $20,000 sitting in your checking account begging to be spent, how would you spend it?

$20,000 can be spent on many things. Let’s review how this sum could be used in a practical sense. You could buy growth and income stocks for your future retirement. You could remodel your master bathroom. You could install new hardwood floors in your home. These are all options which would result in increased savings or home equity; true investments.

What are some other ways you could spend $20,000? You could buy an inexpensive car. Of course cars depreciate in value, so you can say “bye-bye” to that $20,000. Or you could go on a shopping spree at your favorite store, such as Neiman Marcus, and spend it on seasonal, trendy, luxury goods. Two ways to watch that money fade away into a small memory.

Then there is the fun way to invest $20,000; an Hermes Birkin. Let’s talk for a minute about why it is considered an investment. The Hermes Birkin has IT bag status ten times over. It never fades out of style and can be worn both casually and for the office; and there’s more. . .

The Hermes Birkin offers superior quality over other handbags. It is handmade and sturdy; it can take a beating, and still look fabulous. So what makes it an investment money-wise?

There are very few specific handbags which increase in value over time. The Hermes Birkin has the most re-sale value of any IT bag. Not only does the Hermes Birkin hold it’s original purchase value, it increases over time as long as it is maintained properly; much like your home.

If you purchased an Hermes Birkin ten years ago for $10,000 and kept it in good condition, it could easily fetch you $15,000 or more right now. Of course, good stocks, and a home remodel, may fetch you more of an increase than a handbag; but at least it doesn’t depreciate in value like a car.

Of course, most people do not have $20,000 to invest in an Hermes Birkin; I know I don’t! So if you want to spend your money wisely when it comes to handbag shopping, there are other investment options.

Besides Hermes, Chanel is the next best thing to an investment purchase. Chanel’s iconic 2.55 shoulder bag, and classic flap bag, increase in value over time. They do not increase as much as Hermes, but they still go up in value. That my friends, is an investment.

Other designers to lean towards if you would like to watch your handbag hold its’ value, and increase in value over time, include Louis Vuitton and Celine.

Of course, just because a designer has a reputation of creating investment handbags, does not mean every bag will increase over time. As with any stock, bond, real estate, or investment in general, there is a risk involved.

The designer or brand could have some really bad press and suddenly loses it’s appeal. The quality could go down and the general public loses faith in the brand. Or, what had once been considered a classic handbag style for forty years, could suddenly become outdated. The horror!

So how do you find a fairly safe investment handbag when shopping? Well, stick to the basics. For Hermes, look for the Birkin or Kelly. The other styles do not hold their resale value as well. For Chanel, stick with the 2.55 or classic flap shoulder bag. The seasonal styles can become “so last year” in a heartbeat. The Boy Bag is still too new to assess.

When it comes to Louis Vuitton, stick to the classic, tried and true styles such as the Alma or Speedy. If the handbags are seasonal, or just appeared on the runway, they are not an investment.When it comes to Celine, look for solid colored bags; stay away from the color blocking. That is a trend.

Remember, part of the investment is wearing the handbag and getting a ton of use out of it. Do not buy handbags just to make your cash grow. If you want your cash to grow, buy some good stocks or real estate. If you want something to use often, and to prevent you from buying or needing other bags, then this is a sound investment in your future handbag style.

So now you have your investment bag and you have decided you need to cash it in. How do you turn handbags into cash? What do you do? Stay tuned as I discuss this next week!

Resale investment handbags around the web:

Chanel 2.55 shoulder bag:

Chanel classic flap shoulder bag:

Chanel Boy Bag:

Hermes Birkin:

Mansur Gavriel: