The safest investment you ever make might just be a Chanel bag

Posted: 15 June 2016 11:40 am

Recent research shows Chanel bags have outperformed many traditional investments.

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Classic designer Chanel first created and introduced the Medium Classic Flap Bag in 1955. Rectangular in shape, with the iconic Chanel quilted leather and convertible chain strap, this bag is the first thing you think of when you hear the word "Chanel".

When the bag debuted, it carried a price tag of $220. Today, the same classic style retails for $4,900.

In the 55 years that the bag has been for sale, the value has only ever increased, an analysis by Baghunter shows. An annual value increase can generally be expected given factors like inflation, but the bag's current value significantly exceeds projections. During the years between 1955 and 2015, inflation averaged at just 3.7% per year. If the Classic Flap Bag increased at this rate, the current value would be $1,967.17 - $2,932.83 less than the current market value.

In the last five years alone, the Classic Flap Bag has seen a 71.92% increase in value. These figures make the bag one of the soundest and highest returning investments you could make, far outperforming the US housing market or the S&P 500.

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However, before we all start running out and buying handbags as investment pieces, it is important to note only certain ultra-luxury bags increase to match current market value and produce returns on the resale market. Bags like the Chanel Medium Classic Flap Bag or the Hermes Birkin Bag will fetch a high percentage of the current market value at resale. Sometimes, they can fetch even more, as we noted just a few weeks ago in Hong Kong.

The record for the world's most expensive bag was broken by a Himalayan crocodile Birkin with white gold detailing and diamonds. The buyer paid $300,168 at a Christie's auction in HK on 30 May 2016.

Resale auctions like Christie's and marketplaces for ultra-luxury like Reebonz or Tradesy are also working to increase the value of bags like the Flap Bag or the Birkin. These marketplaces increase the accessibility of these already highly-sought-after products.

According to luxury resale marketplace Baghunter: "The huge interest in purchasing handbags through these marketplaces has also seen the resale value of Chanel bags skyrocket due to the simplicity of the process for investors, collectors, and handbags aficionados to buy, sell, and consign their handbags via these means. Many ultra-luxury handbags marketplaces promise payment as high as 80% of the sale value to people who wish to sell their bags this way, with payment offered in as little as 48-72 hours by some marketplaces."

So next time someone is persuading you to invest in stocks, remember there's never really been a better time to invest in Chanel.

Note: All dollar amounts are in US dollars.

Images: Shutterstock

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