Are Luxury Handbags Worth the Money?
There have been numerous debates on the topic of luxury handbags and whether or not they are worth the money, and the short answer is sometimes. Over the years, designer purses have grown in popularity, so much so that many consider them to be investments. Investing is the process of spending money to generate money, and Forbes has stated that many luxury bags have “experienced a valuation spike of an average of 83% in the last ten years,” generating more money than spent. While this is true, not all handbags are investments and not all are worth the money.
While these bags are considered investments, the consumers are not just paying for the bags, but most of the time, the brand name. Established luxury brands have a headstart in the designer market in general, and that’s the main reason why these brands are able to price their bags at a steeper price.
For example, Hermès is well known for its handbags. The Birkin and Kelly variants are infamous for their exclusivity, popularity, and most importantly, price. Even if you have the money (around $10,000 to $20,000), it doesn’t matter unless you have a relationship with a Sales Associate at Hermès. The most common process of getting offered one of these bags is to buy random Hermès items in an attempt to get to know your sales associate, which is basically just throwing money at Hermès to spend even more on a bag. The bags are ridiculously expensive, with the most expensive Hermès bag ever sold being the Himalaya Niloticus Crocodile Kelly 25, for $437,330. While they have ridiculous prices, the annual return on these bags is estimated to be around 14.2% annually, outpacing the price of gold.
Chanel is also famous for its bags, with the timeless bags have been kept out of the trend wormhole, steadily maintaining popularity. The Chanel Medium Classic Flap bag’s thirty-year compound annual growth rate is 7%, a little less than half the annual return of the Hermès bags. The Chanel Flap bags have been called timeless, and the numbers throughout the years have proved it.
While the Hermès bags and the Chanel Flap bags are statistically worth the cost based on the high annual return, many brands are focused on keeping up with the trends and having bags that go out of style in a month. Luxury trends cost thousands of dollars and still become “cheugy” ridiculously fast. So, while some of these bags are timeless and absolutely worth the money, purchasing and following luxury trends is a surefire way to get a luxury handbag that isn’t worth the money and time.
By Caroline Lackey