Luxury Investments Are in the Bag

From Chanel to Hermès, luxury handbags are among the fastest-growing assets for collectors.

By Kris Manty

Grace Kelly with Prince Rainier III of Monaco in 1956, holding the 
style of Hermès handbag that was named after her. 

When Princess of Monaco Grace Kelly became pregnant in 1956, she used her Hermès handbag to shield her burgeoning belly from the paparazzi, who were always photographing her. At the time, her handbag was known as the Sac à Dépêches, but because it was thrust into the spotlight with the former actress, customers kept asking the company for the “Kelly bag,” which it was officially renamed. Not only is the iconic Kelly still a top “it” bag for its craftsmanship and design, but it’s also eagerly sought by collectors for its investment payoff.

This matte white Himalaya Niloticus Kelly 28 with 18k white gold
and diamond hardware sold for a world record $513,000 in 2021.
Courtesy of Christie’s.

Accessories and Assets

Since the pandemic, luxury handbags by Chanel, Hermès, Louis Vuitton and other brands have been one of the fastest-growing assets among collectors. Though not many people bat an eye anymore when collectors spend millions for a baseball card, coin, or comic book, buying a luxury handbag can seem like a frivolous purchase when inflation climbs and households struggle with increasing living costs. But for savvy collectors, some purses are more than accessories and are viewed as investments just as lucrative as real estate and stocks—and that’s not wrong. It’s smart!

According to global market research firm Data Bridge, the luxury handbag market is growing and is projected to reach $42 billion by 2029. In a 2022 report by Credit Suisse, the global financial consulting company named handbags one of the best collectible investments for 2023, beating out art and jewelry in resale value. Analysts found that the average value of designer purses has increased by 92 percent in the last decade, whereas art increased by 84 percent and jewelry by 53 percent.

Luxury labels are also increasingly catering to collectors by releasing their most prized handbags in minimal numbers. These one-of-a-kind purses can fetch hundreds of thousands at auction.

While you might think economic uncertainty would dampen the trend, experts say this is not true. A report by management consultancy Bain & Co. forecasted increased resilience to recession in the worldwide luxury goods market after robust growth in 2022—and investing in luxury handbags is expected to keep growing.

Financial experts say that since the pandemic, luxury handbags like these
Louis Vuitton and Hermès bags have been better investments than art and jewelry.
Courtesy of Heritage Auctions

The Rise of the Pandemic Purse

While collecting and investing in designer handbags is not new, the soaring popularity stems from a bigger boom in luxury goods that began during the pandemic. Luxury spending in the United States was 47 percent higher in 2021 than it was in 2019, according to Bank of America. Confined to their homes, Americans splurged on designer items, including Hermès Birkin and Kelly bags that have set auction records in the last few years.

The collector pool is also diverse, ranging from serious buyers collecting for 20 or more years to younger women looking for their first Chanel purse. The increased popularity of luxury handbags is thanks, in part, to these younger collectors taking note.

In 2022, Generation Z (people between ages 10 and 25) and millennials (between ages 26 and 42) accounted for 72 percent of the luxury goods market. Due to skyrocketing luxury prices, it has, in fact, now become a lucrative new hobby for these two generations to flip designer handbags.

Of course, collectors need to be smart about the handbags they buy, as not all are guaranteed to have increased value. Deep pockets are also required. The most coveted investment-quality handbags with the highest prices and appreciation values are the big three power purses: Hermès’ Birkin and Kelly bags and Chanel’s Flap Bag.

The Birkin

When French-English actress and singer Jane Birkin and Hermès chief executive Jean-Louis Dumas sat next to each other on a flight in 1981, they brainstormed the ideal weekend bag. When the actress’ namesake Birkin bag was released in 1984, it was everything it remains today: handcrafted of the finest leathers, limited availability, and designed for an exclusive clientele. It wasn’t until the “it bag” trend in the 1990s that the Birkin became a cultural icon.

Though the elegant and timeless trapezoid-shaped Birkin is available in various sizes and materials, the most coveted and collectible handbag today is the crocodile skin Himalaya Birkin. It’s a purse, investment, and piece of art rolled into one. These Birkin bags can fetch anywhere from $100,000 to $500,000 on the resale market.

A shiny rose Scheherazade Porosus Crocodile Birkin Bag with Palladium
hardware in the Luxury Boutique at Heritage Auctions for $80.000.
Courtesy Heritage Auctions

The Hermès Himalaya’s delicate white-to-gray ombré mimics the snow-capped summits of its namesake mountain range. Highly sought after and rare, Himalayans continue to be the holy grail in any serious collection, and with demand far exceeding supply, it’s not surprising that these bags command top dollar at auction. In 2020, one of these Birkins brought approximately $382,295 in a Christie’s auction, setting a world record. In 2022, that record was broken after a diamond-embellished version went for a whopping $450,000 in a private sale at Sotheby’s.

The Kelly

Hermès’ original top-handled bag was created in 1892 to carry boots and a harness. In 1923, it was redesigned for the wife of automobile magnate Ettore Bugatti to fit into a car’s side pocket. It was modified again in 1935 by Robert Dumas-Hermès, who made it smaller, added a belt, and named it Sac à dépêches.

This rare matte white Himalaya Niloticus Retourné
Kelly 28 handbag with palladium hardware sold for $355,000.
Courtesy of Christie’s.

The bag’s popularity skyrocketed after Grace Kelly was seen carrying it everywhere in the 1950s, and soon after, it was christened the Kelly bag. Like its namesake, the Kelly bag also wears the crown as the most expensive handbag sold at auction. In 2021, a rare matte white Himalaya Niloticus Retourné Kelly 28 with palladium hardware sold for a then-record $355,000 at Christie’s in Hong Kong, and later that year, that world record was shattered after Christie’s sold a matte white Himalaya Niloticus Kelly 28 with 18k white gold and diamond hardware for $513,000.

The Flap Bag

Coco Chanel left behind a legacy of inventions we still utilize today. Her significant contribution to handbags came in 1955 when she created the rectangular Chanel 2.55 Flap Bag, named for the month and year it was made. The innovation came from having a shoulder strap—until 1955, women only had top-handle totes and pocketbooks or clutches. Women immediately became fans of its practicality, including the adjustable chain strap and accessible back slip pocket.

However, the Chanel purse that became synonymous with the brand was created in 1983: the Chanel Classic Double Flap. After Karl Lagerfeld became creative director, he reinterpreted the 2.55 with two new features—a Double C turn-lock closure and a leather woven chain. Lagerfeld’s Classic Double Flap was a big hit. The simplicity and universal wearability of the Double Flap make it one of the most sought-after pieces ever crafted.

Analysts at Credit Suisse noted that Chanel handbags specifically “offered the best inflation protection.”

There are numerous other luxury handbags by other brands that collectors and investors actively watch in the new and resale markets. Many buyers are also shifting to trendier and more affordable styles by brands like Bottega Veneta and Fendi instead of ultra-luxury classics.

Louis Vuitton blue ostrich mini Capucines
Bag with silver hardware sold in 2022 for $9,375.
Courtesy of Heritage Auctions

Whatever their price tag, luxury bags are pieces of wearable art made with the finest craftsmanship and materials. It’s essential to properly care for and insure your prized pieces to keep them safe and maintain their value.

Despite the hefty values some handbags carry, above all else, the ones worth collecting and investing in are the ones you will enjoy for years to come.

You may also like:

Have Coach Purse, Will Travel

Judith Leiber Purses: A Marriage of Sparkle, Imagination

Antique Beaded Bags Are Glamorous and Collectible

On the Road — Hillwood Estate & Museum, Washington, D.C. 

We traveled to Washington, D.C., for a visit and spent an afternoon at Hillwood Estate, Museum & Gardens. Hillwood was the home of Marjorie Merriweather Post (1887–1973), heir to the Post Cereal Co. empire, businesswoman, socialite and philanthropist. Post bought the house and property in 1955. It sits on the edge of Rock Creek Park, which winds its way through Northwest D.C. We went there to see a collection of Dior clothing worn by the late Grace Kelly, Princess of Monaco, which was on exhibit in the Adirondack cabin Post had built on the grounds. We stayed the rest of the day for everything else.

Marjorie Post was an avid collector of 18th-century French and pre-Revolutionary Russian decorative arts, and the home is filled with treasures. Some are one-of-a-kind and irreplaceable, such as two Fabergé Imperial eggs that were commissioned as gifts from Czar Nicholas II to his mother, the dazzling wedding crown worn by the Empress Alexandra of Russia and the chandelier in the breakfast room that belonged to Catherine the Great.

While it was incredible to see such exquisite things, the museum-quality French furniture, Beauvais tapestries, Sèvres Blue Celeste and Rose porcelain, pre-Bolshevik Russian silver tea sets, chalices, religious icons and porcelains, Chinese jades, enameled boxes, jewelry by Cartier and Harry Winston, and so much more, made it seem like walking through the categories of the Kovels’ price guide.

During her many parties, Post delighted in showing her collections to guests, encouraging them to pull out drawers in display cabinets that contained information about the objects. Items are still arranged that way—a collector’s home rather than a museum. Curious visitors today can follow along with an audio tour or a tour guide for information. But guests can still open drawers in Post’s dressing room, for example, and view carefully laid corsets and accessories.

The kitchen looks like it is ready to prepare dinner for 24, with vintage appliances out and ready. And the butler’s pantry cupboards are full of “everyday” dishes and glassware, from ruby thumbprint goblets to enameled Czech glass dessert ware.

Outside, groups of lawn chairs are arranged in quiet nooks and overlooks, inviting visitors to linger and enjoy the “Lunar Lawn,” a rose garden, a Japanese-style garden, a French parterre, a putting green and other spaces. Food is available in the Merriweather Café to eat indoors or out. They will even lend you a picnic blanket.

Marjorie Post’s vision was to have Hillwood, its treasures and grounds maintained as a museum after her death. It was full of delights. Learn more at Hillwoodmuseum.org.