Fashion investments worth splurging on
Monday, 29 July 2019
What do Birkin bags, Hermes scarves, and Chanel jackets have in common? They're all high-end luxury fashion statements that can retain — or even increase — their value over time.
Much like fine wines, art, and jewelry, there's a growing secondary market for luxury clothing and accessories. Interest in secondhand luxury fashion is on the rise amid a general uptick in secondhand clothing sales. The total secondhand apparel market – including both luxury and non-luxury items – is expected to double in size from $24 billion in 2018 to $51 billion in 2023, according to a recent study by thredUP, an online secondhand apparel shop.
Of course, not all luxury items increase in value. If you're looking to buy a luxury handbag or scarf as an investment, you'll need to be very selective.
Investors should buy from iconic designers that have appeal in many parts of the world. A focus on big, in-demand fashion houses like Versace, Chanel or Dolce and Gabbana broadens the future market of buyers, which includes not only wealthy individuals but also museums.
Focus on condition
Be sure to preserve the condition of the item. For highest resale value, the designer fashion items need to be in excellent condition, not altered, and not in need of repairs. To reduce wear and tear, you should not wear or use a luxury bag, limited edition dress, or scarf if you're planning to hold on to it as an investment – just as you would not drink from a rare bottle of wine that you plan to sell.
Aim for rarity
Limited edition items or items that have high demand but limited supply tend to fetch higher prices. Consider the long waiting list for the classic Hermes Birkin bag, which has been carried by the likes of Jacqueline Kennedy, Melania Trump, and A-list celebrities like Victoria Beckham. Customers have been willing to pay a premium to bypass the queue, paying $19,000 for an average mint-condition model instead of $12,000. It goes up from there. In 2017, an extremely rare white Himalaya crocodile diamond Birkin bag sold at a Christie's auction for $379,261, making it the world's most expensive handbag. Classic Chanel handbags also see consistent demand.
For an interested buyer or seller, there are now more options than ever. An ever-growing number of online retailers, such as the RealReal or 1st Dibs, specialize in luxury, while auction houses such as Christie's and Sotheby's regularly auction fashion and accessories items.
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