If you haven’t noticed, sporting designer clothing and living a life of luxury, whether perceived or real, have become the ambitions of the ‘now generation. From outfits plastered with monograms of Gucci, Dior, or Fendi, to posting pictures of sitting on private jets to dining in name-brand restaurants in sexy global hot spots, there is no denying that things are more opulent today.

Consumers drive this lifestyle demand for high-end goods to show their success — high-quality items due to the rise in per capita affluence. Luxury handbags are premium due to their high cost, value-added features, and specifications.

The growth of digital marketing and online premium experiences has also boosted the luxury handbag market. The handbag market size was valued at US$48.70 billion in 2021. It is projected to reach US$78.85 billion by 2030.

In 2022, Credit Suisse named handbags one of the best collectible investments for 2023, beating out art and jewellery in resale value. Analysts found that the average value of designer purses has increased by 92 per cent in the last decade, whereas art increased by 84 per cent and jewellery by 53 per cent.

But when did a handbag become such a fastidious status symbol?

Enter Princess of Monaco Grace Kelly in 1956 when she used her Hermès handbag to shield her pregnancy from the paparazzi, who always followed and photographed her. At the time, her handbag was known as the Sac à Dépêches. Still, because it was such an iconic photograph moment, her handbag became a spotlight feature, and Hermès customers kept requesting the company for the “Kelly bag”. Sometime after, the company officially renamed the style The Kelly.

Since the pandemic, luxury handbags by Chanel, Hermès, Louis Vuitton, and other brands have been among the fastest-growing assets among collectors. A classic mid-size Chanel 2.55 bag (24x16x7cm) now costs €9,700 or nearly US$11,000, a third more than before the pandemic and double its price a decade ago. To put things in perspective, that is $1.7 million for a relatively small handbag.

In 2022 Chanel shattered profit records; its sales rose by at least 17 per cent, exceeding US$17 billion, which was 23 per cent more than before the pandemic.

It was the same for the Bernard Arnault LVMH conglomerate, which earned €79.2 billion; Louis Vuitton generated €20 billion, which set a new all-time record.

For its part, Hermès grew by 23 per cent in 2022 compared to 2021. So, while the world was bracing for a recession then, the super luxury market thrived, which led analysts to forecast that luxury handbags were recession-proof.

So, apart from the conspicuous luxury spenders, savvy collectors now buy luxury handbags in the same way others buy art, real estate, and stocks. For example, in 2021, Christie’s sold a Hermès Matte White Himalaya Niloticus Crocodile Diamond Retourné Kelly 28 with 18K white gold and diamond hardware for US$515,416, becoming the most valuable handbag ever sold at auction.

But what really gives with some of the absurdly high prices of luxury handbags? Why are people paying thousands of euros or US dollars for a handbag they carry daily?

Experts say it is because of craftsmanship, exclusivity, investment, serial number traceability, and materials. Authentic luxury handbags are handmade by expert artisans and conceived by inspired and in-demand designers. Like any other expert in their field whose cost will be more per hour than a novice, the same obtains. And, especially with luxury handbags, when you look closely at these pieces, you realise that every stitch is perfectly hand-done and the quality of the leather and make will last a lifetime with good care.

Additionally, since many luxury handbags are, in fact, handmade, it is not possible for production to a factory line of mass-produced pieces. Louis Vuitton was created to serve the French Royal Court. Sometimes people stay on wait lists for years, paying the price upfront until their handbag is ready for shipment — case in point, the Birkin Bag by Hermès.

Moreover, the likelihood of seeing others with your handbag has just got smaller as Chanel recently won its court case against luxury reseller “What Goes Around Comes Around”. The jury voted unanimously in favour of Chanel for its trademark infringement, false association, and unfair competition claims, as well as its false advertising claims.

In a statement post-verdict, the company said: “Chanel welcomes the ruling, which demonstrates Chanel’s unwavering commitment to protecting consumers and its brand against all false association, trademark infringement and counterfeiting, and false advertising… such infringements hurt consumers and harm the Chanel goodwill and brand because they are likely to confuse the public as to the nature of the Chanel-branded items they are purchasing.

“This ruling not only establishes boundaries within the luxury resale market but also safeguards consumers against deceptive advertising and counterfeit products,” said Brittany Singh, intellectual property attorney at Lvlup Legal.

Furthermore, the experts say that you can feel the difference if you hold a genuine Chanel designer handbag in one hand and a mass-produced or counterfeit handbag in the other. The genuine article’s leather is often of the finest quality cow skin or other rare exotic animals. The locks, chains, and other metal accents on luxury handbags are often plated with pure silver, palladium, or diamond-encrusted. I wouldn’t know, as I don’t own one, and I can’t see myself spending that amount on a handbag.

Therefore, if you have a collection of luxury handbags or are interested in owning a piece from a luxury designer it’s essential to understand their value and understand their quality.

Additionally, if they have increased in value over time, you may have an investment that justifies your price as companies like My Gemma will resell your handbag once they can authenticate it.

Good luck as you shop around for your best investment, and remember to keep your box and serial number cards that come with the bag in case you want to sell them in the future.

Have a Happy Easter.

Lisa Hanna

Lisa Hanna is Member of Parliament for St Ann South Eastern, People’s National Party spokesperson on foreign affairs and foreign trade, and a former Cabinet member.