Why London’s wealthy elite are banking on their handbags

Your wardrobe’s most lucrative asset is quietly gaining value year on year. According to the Knight Frank Wealth Report 2025, while traditional luxury collectibles like art and wine saw modest declines, handbag investments bucked the trend, appreciating by 2.8% over the past year and rising an impressive 85.5% over the past decade.

So why are ultra-high-net-worth individuals turning to handbags as a legitimate investment vehicle? And what should collectors know before buying in?

“One of the biggest risks associated with luxury handbags is, unsurprisingly, fashion,” says James Purcell, managing director at Coutts. “While conventional assets deliver a regular cash flow, like rent from property or dividends from stocks, luxury handbags do not. You’re entirely dependent on capital appreciation. If your chosen purchase goes out of fashion, there’s no guarantee someone will pay more for it than you did.”

According to Purcell, scarcity is one of the primary forces driving the investment appeal. “In the case of luxury handbags, we’re often talking about very limited manufacturing quantities, and in many cases, the handbags are one-of-a-kind. This scarcity drives the shift toward viewing fashion as a financial asset, in a manner not too dissimilar from the art market or even gold.”

But unlike gold, a handbag won’t sit in a vault without a care. “Investors need to be mindful of dangers such as humidity,” says Purcell. “It is advisable to store the bag in a breathable dust bag while appropriately stuffed to maintain its form. Insurance and storage must be considered, as with any luxury asset.”

What makes a handbag a good investment?

Enter the investor-collector hybrid: the client who buys with both sentiment and strategy. Katrina Aleksa, a luxury collector and UHNW gifting advisor, sees the value of handbags as being beyond the practical. “Luxury handbags, particularly iconic styles like the Hermès Birkin and Chanel Classic Flap, have consistently proven to be resilient and appreciating assets within the luxury market,” she says.

“Their limited production, coupled with notoriously long waiting lists, creates a sense of intrinsic scarcity that drives long-term demand and value. The secondary market for these pieces is incredibly vibrant; simply walking through any affluent London neighbourhood, you’ll spot these bags prominently on resale. Their instantly recognisable design, renowned craftsmanship, and cultural significance make them modern-day status symbols as well as collectible investments.”

Indeed, data supports this rising demand. According to resale platform Rebag, Hermès bags retain an average of 103% of their retail value on the secondary market, with rare editions like the Himalaya Birkin fetching upwards of six figures at auction. Chanel’s Classic Flap has also seen consistent price hikes, making older models more desirable as they become relatively more affordable than new editions.

Aleksa also stresses the importance of keeping the whole package. “When purchasing luxury items, it’s important to be mindful of how you’ll travel with them and how you plan to store them. They should be kept out of direct sunlight to preserve their condition. Keep the original boxes and receipts, as these are invaluable should you decide to resell.”

Authentication is equally crucial. “When buying pre-owned, you should be able to trace the original purchase and always use reputable authenticators to verify the item’s provenance,” she advises. She also notes a growing number of collectors are now turning to platforms like Sotheby’s and Christie’s, where heritage and legitimacy are tightly controlled.

Still, while luxury handbags may offer a new way to diversify wealth, they come with caveats. “Is the bag in pristine condition? Is it one of the highly sought-after styles from Chanel or Hermès? Does it come with the original box, dust bag, and paperwork?” Aleksa asks. “You can’t always sell a handbag overnight, even with the abundance of resale platforms available.”

Beyond condition and provenance, timing plays a role too. Some investors treat handbag buying like they would stocks: purchasing in advance of predicted price increases or during brand anniversaries when collector interest peaks. For example, Chanel’s annual price adjustments have become predictable markers for increased resale value on older styles.

The future of fashion assets

Back at Coutts, Purcell agrees that investing in handbags requires careful consideration. “Luxury assets should not be depended upon to provide investment returns, as they may prove to be very volatile. Any investment should be made in the context of your liquidity and long-term needs.”

Despite the risks, handbags are growing in popularity among the well-heeled for reasons beyond returns. “There is an emotional component that traditional assets don’t deliver,” Aleksa adds. “You wear them, enjoy them, and still potentially profit from them.”

Lifestyle and liquidity often collide in this uniquely tactile investment category. However, unlike other luxury assets, like classic cars, fine art or rare wines, handbags don’t necessarily require millions to start collecting. Aspiring collectors can begin with mid-range brands, like Loewe or Bottega Veneta, which are gaining traction in the secondary market. As resale platforms like The RealReal, Vestiaire Collective and Sotheby’s expand their services, so too are access and visibility improving for newcomers.

Furthermore, the demographics are shifting. According to a 2024 Bain & Company report, Gen Z and Millennials are set to account for 70% of the luxury market by 2025. Their appetite for sustainable, high-quality fashion fuels a circular economy where pre-owned goods are no longer seen as second-best, but as smart, stylish investments.

To safeguard your investment, experts recommend setting up a proper inventory, just like you would for special pieces of art or jewellery. Insurance valuations should also be updated regularly, while specialist policies may be needed. And while it may be tempting to carry your asset to dinner, think twice. As Aleksa puts it, “A handbag is still an object of use, but when it becomes an investment, it’s also an object of care.”

Handbags, just like art, require a discerning eye, proper care and a touch of patience. For those willing to do their homework, invest with care and think long-term, a well-chosen bag might not just complete your outfit, it could quietly make you richer.

Read more: Navigating divorce in the age of lifestyle assets