When navigating the world of luxury fashion, you might often find yourself asking, “Is it worth buying a designer bag?”  “Will a luxury leather bag be a good investment?”.  We’re here to help you! But a heads-up, the answer isn’t as straightforward as you might think; it will always depend on the goal: investment, look, or both.  Let’s delve into it.

Luxury or Fashion?

If you are considering buying a designer luxury bag for the first time, you might not know where to start or whether it's a good idea. Firstly, it's important to understand what differentiates luxury handbags from others. Is it just the label? The answer is no! A luxury handbag is more than a simple accessory. It comes with a history, quality, and craftsmanship. These bags are carefully designed, crafted with high-quality materials, and often associated with prestigious brands.

But be aware! Some luxury fashion brands, including well-known ones, have been neglecting the quality of their materials and craftsmanship. Therefore, always do your research before making an expensive purchase. Secondly, you should have a clear idea of what you want. The perfect luxury bag for you will depend on your intended usage, your budget, and your personal style.

What is an investment to rely on?

You’ve probably heard that buying a luxury leather handbag is a great investment, but is it really true? Nowadays, it is very common to have designer handbags as a prominent category in auction houses. The growing popularity over the years led Knight Frank Wealth Report to include handbags as a popular investment in its annual Luxury Investment Index, alongside watches, whiskey, and cars.

According to the Wealth Report 2024 by Knight Frank, which tracks the performance of 10 popular investments of passion, the Luxury Investment Index fell 1% over the year and handbags decreased by 4%. Despite that, the price change of handbags over the last ten years has increased by 67%. On The RealReal reselling platform, average prices for designer bags in 2022 were up to 26% compared with 2019.

Some of the increase can be explained by the pandemic and the accompanying inflation. However, there are questions about whether some of the prices are justifiable investments, leading some luxury fans to reconsider before buying.

Chanel and Hermès

Famous brands like Chanel and Hermès have garnered attention for their high resale values. But are these the best brands for an investment? You’ve probably heard of Tanner Leatherstein on TikTok, who takes apart luxury bags to analyze their quality. His findings show that some luxury bags are not as high in quality, affecting the credibility of the brand.

Chanel is one of the brands that has been aggressively increasing its prices. A Chanel 2.55 large flap bag now costs €11,100, which is 91% more than in 2019. This means that an iconic Chanel bag could be a good investment, but recently the brand's quality has been questioned, raising concerns about the materials and craftsmanship.

As for Hermès, their bags are known for being timeless, with impeccable craftsmanship and quality. An article in Fortune mentioned that the value of a Birkin bag can double approximately every five years, but it most commonly takes a decade to double in price. The price increase depends on the bag and its rarity. A great example of a price increase is the Picnic Kelly 30 bag. According to the Luxury Handbag Report 2020, the average price of this bag between 2010 and 2014 was €18,806.88, and between 2015 and 2019, the average price was €33,464.49. The Birkin bag could be considered an example of a potentially good investment. Due to its high demand and difficulty to buy, once someone gets their hands on it, they could sell it right away in perfect condition and even make a good profit with it.

In the past years, luxury brands other than Hermès weren’t typically seen as an investment whose value could increase over time. According to an article in BOF, it’s still generally the case. However, as primary market prices grow and top luxury brands limit their distribution, resale prices are increasing, and highly sought-after labels are retaining a significant portion of their retail value at auction and online resale. Even though not all bags can yield a profit, according to Bonhams’ Randel in a BOF article, you could sell a bag you’ve had for several years at 80 percent of its original value on the secondary market.

There are other low-profile luxury brands that should also be considered, like Peter Nitz, an ultra-quiet luxury leather brand. Others can follow that road like Phoebe Philo, Berluti, Ferragamo, Biagini, Létrange, Mandelli, Loro Piana, Frank Clegg, Borbonese, or even lesser-known brands that have the potential to grow such as Ownever. The bags of less famous brands tend to be less expensive; you can find bags for less than €1000, meaning a smaller investment and possibly the same quality. This also carries a risk because it can be very difficult to predict if a brand will gain more success and increase in value.

Keeping a leather luxury bag for resale

If you want to buy a luxury handbag and sell it in the future as an investment and make a profit, you need to keep in mind that you can’t use it. You should save the receipt to prove its authenticity, and the bag should be in perfect shape without any signs of use. So you need to store it properly and keep it as pristine as you can. 

Craftsmanship investment vs Fashion investment

If you are considering investing in the luxury market, it’s crucial to distinguish between brands that focus more on craftsmanship and those that are more known for being fashionable and trendy.

The craftsmanship-focused brands, like Hermès or Peter Nitz, prioritize high-quality materials, timeless designs, and prestigious artisans. The handmade parts are very valuable, and not compared to the stitching machine's work. These brands are more likely to have long-term value and longevity. Brands like Gucci or Prada can be considered more fashion-driven due to their frequent collection updates and trendy designs. These brands also present a great potential for investment due to their notoriety and success. However, it’s best to choose a bag from these brands that can prevail over time and transcend trends, as timeless pieces tend to be easier to sell and have higher resale value.

Best vintage bag styles for investment

When it comes to vintage designer bags, certain models have proven to be exceptional investments over time. For instance, Louis Vuitton's vintage monogram bags, such as the Speedy and the Noé, are popular choices that often see increased value in the resale market. Also search for some limited editions that are sometimes rare, and their resale market value rises over time. The Gucci Jackie O and Bamboo bags are iconic models that have retained their appeal and value over the years. Another notable mention is the Fendi Baguette, which has become a timeless piece, especially with its resurgence in recent fashion trends. Additionally, Dior's Lady Dior and saddle bags have also shown significant appreciation in value, becoming highly sought-after items in the vintage market. Investing in these timeless, vintage models can provide both aesthetic pleasure and financial returns if you go for the classic models and also their limited editions. 

Other 5 models from luxury brands that have been good investments lately include:

1. Celine Luggage Tote: Known for its structured design and minimalist appeal, this bag has maintained a strong resale value.
2. Balenciaga City Bag: Popular for its edgy design and versatility, this bag has become a staple in the resale market.
3. Prada Galleria: A classic model with a timeless design, the Galleria has seen consistent demand and good resale value.
4. Saint Laurent Sac de Jour: With its sleek and elegant design, this bag has retained its popularity and value over time.
5. Givenchy Antigona: Recognized for its structured shape and modern design, the Antigona remains a popular choice in the resale market.

Deciding to invest in a luxury designer bag requires careful consideration of your goals, whether they are personal enjoyment, fashion, or financial investment. Luxury leather bags from brands like Hermès and Chanel can offer significant long-term value, though the market and quality can fluctuate. For fashion enthusiasts, brands like Gucci and Prada offer trendy options, though they may not always retain their value. Researching lesser-known but high-quality brands can provide similar luxury at a lower cost. Ultimately, your decision should be guided by thorough research and a clear understanding of your intended use and investment strategy.