Luxury handbags are often prized for their quality craftsmanship and for the social status they display.
Still, consumers have recently treated them as “passion assets” because their value tends to hold or even appreciate over time.
Perhaps not recently, one could argue that this trend started shortly after 1961 when First Lady Jackie Kennedy used her Gucci’s Fifties Constance luxury bag as a shield against paparazzi.
Shield notwithstanding, the photo was snapped, and the Fifties Constance—which Gucci renamed the Jackie 1961—became a higher-value and sought-after item. Gucci has reimagined the Jackie 1961 several times over the decades, changing from a piston lock to a geometric buckle and back to a piston lock again. Still, the bag has remained a fashion icon, a centerpiece in Gucci’s collection, and a collector’s item.
The Power of the Passion Asset
Not every luxury handbag gets held up by a celebrity to fend off intrusive photographers, but the story of Jackie 1961 illustrates how a luxury handbag can not only hold its value but also appreciate in value over time. Feminine leather accessories like Chloe handbags and comparable items from renowned fashion brands such as Hermès, Chanel, and Louis Vuitton have become recognized as wearable passion assets.
A passion asset is a physical, collectible item with emotional and aesthetic appeal that can also be an investment vehicle due to its craftsmanship and the recognizability and quality of the brand. Both collectors and investors have begun seeking the highest-quality luxury handbags, treating them as wearable passion assets expected to yield high returns over time.
The luxury handbag market appreciated by 15% in 2024, with much of the growth coming from the fashion designs of Hermès and Chanel. That rate of development means that last year, luxury handbags outperformed mutual funds, many stocks, and other more traditional investment vehicles.
The Hermès Birkin, known for its impact on popular culture, has appreciated consistently for three and a half decades.
“Did you know that Birkins are better investments than stocks?” asks Nicola Ghin, designer handbag expert at The Luxury Closet. “While gold and stocks are volatile by definition and might give you a financial rollercoaster, Birkin bags have increased in value by a small and constant percentage over the past 35 years. Their demand is constantly growing, all the while their availability is becoming less and less.”
What Drives Up Value
The long-term worth of a passion asset like a luxury handbag is driven not only by brand prestige, craftsmanship, and longevity due to an exquisite selection of materials (such as premium leather and exotic skins) but also by limited editions.
Scarcity, when paired with the other factors, drives value. Keeping an eye out for limited editions from high-end houses like Hermès, Chanel, and Louis Vuitton can help collectors make purchases that will allow them to tap into the luxury resale market later.
Consider the Margaux from Chanel’s The Row. It is visually distinctive and a limited edition, so it is hard to find. Still, celebrities like Jennifer Lawrence, Kendall Jenner, and Zöe Kravitz have all been photographed with it.
Stacey Chia, Head of Communications at Vestiaire, says the resale price on the Margaux is now three times higher than in 2020. And Kelly McSweeney, merchandising manager for The Real Real, shares that, on average, the Margaux now sells for 177% of its suggested retail price, “with average selling prices increasing by $1,650 compared to last year.”
Thanks to this swift appreciation, Vogue lists the current value of the Margaux at $4,350, which is exceeded only by Bottega Veneta’s The Andiamo Bag, which is valued at $5,500.
Timeless Designs
Collectors will want to look for handbags that represent timeless designs besides selecting exclusive series and limited editions. Chasing fashion trends, which may be fleeting and momentary, can add volatility to the value of one’s portfolio of passion assets.
A luxury brand’s identifiable monogramming or distinctive hardware can also add value. Of course, collectors will also want to care for their bags, taking advantage of the durability of their materials without taking that durability for granted. Collecting a portfolio of luxury handbags as passion assets can be exciting and financially rewarding with planning, careful selection, and care.
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