Investing in the stock market is not the only way to grow your portfolio. Certain other investments, such as luxury bags, can sometimes bring in big returns. Over the years, the big names in leather goods have increased their prices, which gives fashion enthusiasts the opportunity to resell their goods at a profit. In some cases.
“The price of a classic Chanel bag has exploded in recent years,” underlines Rim Elias, co-founder with her sister Rita of the Montreal boutique Retyche, specializing in the resale of luxury bags.
In 2016, such a medium-sized bag sold for 4,900 US dollars, or approximately 6,600 Canadian dollars. Today, it costs more than double: 10,200 US dollars, or almost 13,800 Canadian dollars.
“The pandemic, with inflation and disruptions in supply chains have certainly played a role, but that is not all,” observes Rim Elias. “Big brands, like Chanel or Hermès, increase their prices to maintain the prestige associated with them,” she says.
Ling Jiang, professor of marketing at the University of Quebec in Montreal, specializing in fashion marketing, agrees.
“Luxury is a world apart. It is a market segment that does not follow the traditional laws of supply and demand. Normally, when the price of a product increases, the demand for that product decreases. However, in the case of luxury, if the price increases, demand follows,” explains Mme Jiang.
Luxury is a world apart. It is a market segment that does not follow the traditional laws of supply and demand. Normally, when the price of a product increases, the demand for that product decreases. However, in the case of luxury, if the price increases, demand follows.
Over the past ten years, the value of luxury bags has appreciated by an average of 60%, according to a report by Knight Frank, a British consulting firm.
Other collectible products were even more successful. This is the case for rare bottles of whiskey (+322%), watches (+147%), collector cars (+118%) and even works of art (+109%).
Make a profit or not
On social networks, like TikTok or YouTube, Internet users tell how they managed to earn money by reselling their luxury bags.
Among others, the influencer Mélyssa Métisse Modeuse, who works in the luxury industry and who is followed by nearly 27,000 subscribers on YouTube, boasts on her channel of having earned 11,000 euros thanks to her investments in bags collectible, or approximately 16,000 Canadian dollars.
Others, who have not been so lucky, advise against the experience.
“The bags that increase in value are often classic bags, in neutral colors. You have to take care of them, keep them away from light and humidity, pad them so that they do not deform…” explains Rim Elias.
As soon as a bag shows signs of wear, or if it has gone out of fashion, its resale value will drop, says her sister Rita. “But, unlike a bag of fast fashion that you probably won’t be able to resell, a luxury bag will retain at least part of its value if you’ve taken care of it,” she explains.
For Professor Ling Jiang, a luxury handbag remains an object of consumption before it can be considered an investment. “Most people buy it to own it, wear it and show it off, not to make money,” believes M.me Jiang.
The fact remains that, if consumers’ predominant intention is not to make a profit, they are nonetheless thinking more and more about the resale value of the products they buy.
According to ThredUp’s most recent second-hand fashion report, the vast majority of Generation Z consumers, 82% of them, take this aspect into consideration when making a purchase. All generations combined, these are 58% of consumers.
For 42% of young people, the fact that a product does not have a good resale value can even completely dissuade them from purchasing it.
Beware of counterfeits
In the case of luxury, to guarantee the value of the products, resellers must ensure that they are not counterfeits.
At their store, Rim and Rita Elias use Entrupy technology to verify the authenticity of the products they market. This is a small system attached to a smartphone that allows close-up analysis of the components of the bag, using an application.
“It analyzes the fabric, the leather, the stitching, the logo… The system compares that to the photos in their database and they can then say if it is real or not,” explains Rita Elias.
If the application’s verdict is positive, Entrupy then issues a certificate, transmitted to the buyers. This is a guarantee of quality that consumers cannot have if they buy on other online platforms that are not certified, says Mme Elias.
Despite inflation and the risk of an economic recession, sales are not falling, testify the two sisters. ” It goes quickly. On average, our bags leave in less than 30 days,” they say.