The Chanel brand is known for its high-quality materials and craftsmanship, making it a popular choice among luxury handbag buyers. While there are no guarantees when it comes to investing, the right Chanel bag can often appreciate in value, making it a worthwhile purchase.
Within this article, we take a look at why these iconic bags offer an opportunity to diversify your investment portfolio.
The prices of luxury goods have been rising for decades, consistently at more than double the rate of inflation. According to Art Market Research, in 2020, the investment potential of handbags eclipsed that of many other traditional collectables, particularly Chanel. Uncertainty in the current economic climate along with the rising costs of living, has resulted in many people looking for ways to diversify their investment portfolios. With an average annual increase in value of 10 – 15%, Chanel handbags offer low volatility which provides more stability, and therefore an attractive portfolio for investors.
Chanel typically raises their prices twice a year, affording them the ability to control the market by boosting the rate of the most sought-after pieces. Recent increases resulted in the “Medium Classic Flap bag” now retailing at ten times what it would have cost in the 1990s. Since October 2021, customers are limited to only one bag, per model, each year, fuelling demand even further. The thriving market is so encouraging, many collectors are choosing to sell their vintage Chanel bags at prices that far exceed what they originally paid.
According to the Financial Times, “A recent study found that it can make more economic sense to invest in a Chanel 2.55 handbag than in the stock market. The JustCollecting Rare Handbag Index, which tracks investment-level bags, found that in the 12 years from 2004 to 2016, the Chanel 2.55 Medium Classic Flap bag had spiked by 230 per cent in value”.
Chanel bag prices on the resale market are renowned for achieving top values and they continue to shift in line with raising retail prices. By controlling what customers can buy and when, Chanel is ensuring that demand always outweighs supply, and this will only continue to drive the prices and growth of the second-hand market.
The exact style, colour and condition of a bag will impact on the value. The Chanel Classic double flap continues to be the most reliable investment, while Chanel’s Deauville Tote and Grand Shopping Tote continue to increase in value on the secondary market at an average of 12% and 10% respectively. The scarcity of Lagerfeld-designed Chanel handbags and some older vintage models means prices are superseding retail as they are so highly sought after.
Chanel handbags also feature as one of the “Big Three” in fashion - Chanel, Louis Vuitton and Hermes, these brands continue to appreciate year on year and consistently make the world’s top 100 most valuable brands. Therefore, Chanel is one of the few brands that will almost certainly increase in value over time.
A Chanel 2011 shopping tote. Estimate £2,000-£2,500
It would be fair to say that it is not a question of if Chanel bags are an investment, but rather when to buy or sell. The expanding demand continues to drive the secondary market and prices, so you can be confident that should you want to resell in future, you are going to see a return on your investment. Many collectors like to rotate their collection, selling their iconic vintage bags in favour of a newer upgrade. The beauty of a Chanel bag is that you have the pleasure of wearing and using your investment, while it continues to appreciate in value and offer protection against inflation.
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