The Courier & Advertiser (Fife Edition)
Luxury handbags are now a girl’s best friend
HERMES HANDBAGS HAVE MORE THAN DOUBLED IN VALUE OVER THE LAST 10 YEARS – MAKING THEM A BETTER INVESTMENT THAN WHISKY AND ART
It’s often been said diamonds are a girl’s best friend – shiny and valuable and a wise thing to invest in. But this year it’s another female staple which is topping the charts of Knight Frank’s Luxury Wealth Report – the handbag. For the first time the collectable designer accessories have knocked Scotland’s national drink off the top spot of luxury investments. The wealth report shows a burgeoning market for fashionistas in possession of the most sought-after accessories, with handbags rising in value by 13% over the 12 months. In the first Knight Frank Luxury Investment Index (KFLII) dedicated to tracking the collectables, Art Market Research (AMR) has delved into the world of this emerging asset class. The focus was specifically on collectable handbags made by Hermes and it was revealed that prices have more than doubled in value over a 10-year period (108% growth). Sebastian Duthy, director for AMR, said: “It’s only been possible to create an index on handbags now because of the frequency with which many iconic pieces are coming to auction today. “Although bags made by other luxury brands like Chanel and Louis Vuitton are also highly collectable, it is those made by Hermes that attract the highest prices and are considered the most desirable.” The index results show that on an annual basis, handbags outperformed both whisky and art, which both recorded growth of 5%. Classic cars slipped by 7%. Overall, KFLII, which is a weighted average of each asset class, fell by 1%. But when the results are looked at over a 10-year period, rare whisky continues to top the charts, rising 564%, followed by cars (194%). KFLII rose by 141%. Andrew Shirley, editor of the wealth report and the Knight Frank Luxury Investment Index, said: “As with other investments of passion like rare whisky, the value of which has risen in recent years, handbags are increasingly being seen as an investment class in their own right. “Collectors are prepared to spend hundreds of thousands of dollars on the rarest or most desirable bags.” Bucking the trend of the past two years, yellow diamonds performed well as declining prices made them more accessible to the end client. While high-end pink and blue diamonds performed very well on the retail side, auction prices appeared low, reflecting the inferior quality of many of the coloured diamonds that find their way to auction, according to the report. Miri Chen, of Fancy Color Research Foundation, said: “The real action here is at retail level, behind closed doors, where the goods sold tend to be of better quality and so fetch higher prices. “Looking ahead, it will be interesting to see what happens to Argyle diamonds, with the mine set to close in 2020.” For those keen to invest in fine wines, a more recent report shows investmentgrade wine can be a pretty good hedge against a catastrophic drop in equity markets. While stock exchanges around the world have tumbled since the outbreak of Covid-19 – the FTSE 100, for example, shed almost a quarter of its value in the first three months of the year – Knight Frank Fine Wine Icons Index remained unchanged. However, Nick Martin of Wine Owners, which compiles the index, points out that this has not always been the case. He said: “During the oil crisis, the 1991 recession, the 1997 Asian crisis, the bursting of the dotcom bubble and the first invasion of Iraq, equities and wine were well correlated. “But since 2008 there has been no obvious correlation. “The China market opened up, the quantitative easing taps were turned on in response to the banking crisis and alternative asset prices inflated.”
Collectors are prepared to spend hundreds of thousands of dollars on the rarest bags. ANDREW SHIRLEY