Expensive purchase: but do the top brand bags resell well? (Image by Pixabay)
An occasional conversation topic at home is my taste for the finer things, more specifically my occasional spending on a luxury goods item. My response is always the same: “It’s good quality, it’s an investment, and it holds its value.”
But when you really think about it, do luxury goods – and more specifically to this column, luxury handbags – hold their value or close to it?
First, let’s explore why people purchase a luxury handbag, as opposed to a regular handbag, especially given that they both can hold the same contents.
An article by Alex Colley, creative director of ikon, a boutique branding and creative agency, suggests there are two types of mindsets.
First, people who purchase because they appreciate the craftsmanship, which is quality and can be used for a long period of time. Often the style of the handbag is classic and the brand is less important, yet it will still be a luxury item. This mindset is typically held by someone with considerable wealth. These individuals value quality over quantity, classic status over trends and understated over flashy, and desire a purchase that can be appreciated over the course of time.
Second, when the purchase is driven by the brand itself and the experience of buying, and there is equal weighing between appreciating the quality of the item and the ability to show it off. This mindset is driven by the desire to be wealthy, and a purchase is driven by brand and exposure. These individuals typically want and want a lot; they focus on trends, presume bigger is better, and are often showy with anything new.
When researching this topic, I remembered a conversation I had several years ago with a family from the Netherlands. It was a conversation that really resonated with me, and I still think about it today.
The parents had their two daughters with them, who were in their early twenties. The father explained that he always told his girls that if they were going to buy anything, then they should buy something that is good quality that you can appreciate over the years and that can hold its value over time.
Regarding jewellery, he explained that they should spend money on classic pieces that you can enjoy over the years as opposed to cheap jewellery that you will waste your money on year after year.
Quality items are classic and should hold their relative value, whereas cheap items are simply cheap, and moreover look cheap.
If we now move beyond the behavioural science of the purchase, and ask instead whether luxury handbags can hold their value, then perhaps the best question to ask is: what is the resale value on these bags?
I can speak first-hand on this topic as there have been two occasions where I have seen the resale of luxury handbags and, more importantly, how busy these resales outlets were.
The first was on a Celebrity cruise; in a specific boutique onboard there were luxury items, specifically handbags and watches. The brands included Prada, Louis Vuitton, Chanel and Rolex.
I remember looking at the items and being very impressed by the quality, but also realising that these items were preloved.
I chatted with the retail attendant, who told me that several of their ships now have a boutique onboard offering preloved luxury items. She proceeded to tell me that they purchase only highest quality resale items – the items must be able to be authenticated, and the demand for preloved luxury items was high because of the quality.
It was, in all honesty, very impressive and clearly someone had done their homework as the resale on the items I looked at was very good.
My second experience took place about six years ago, when I was very fortunate to spend a few days in Monaco. There is nowhere quite like Monaco; I clearly remember walking past several resale stores, selling luxury handbags, luxury watches, etc.
I went into one store, and between my husband’s broken French and the store attendant’s broken English I learnt these stores were very popular – people come from all over Europe to Monaco to purchase resale luxury items as most items are only used for a season or two and are then resold.
The quality of these items were amazing; they still held good resale value and had the exchange rate been much more favourable my story would have ended with a purchase.
Now, to return to the original question – do luxury handbags still hold their value? It is very clear even following a simple Google search that the resale market on luxury handbags is significant – there is website after website selling these, and beyond the websites, there are auction houses and also private sellers.
In Vogue magazine – yes, I realise that is not the best reference, but it holds some validity given the topic – Megan O’Sullivan wrote a sustainability article specifically about which handbags have the highest resale value, and all the bags in the article were classic styles, as the demand for classic always exceeds trends.
Therefore, to answer the question, you would have to conclude that the luxury goods still retains a significant portion of its value for two reasons:
1, The luxury item is considered luxury, whether new or preloved
2, The demand for the luxury item, new or preloved, is still significant
On that note, time to take a trip to Monaco!
References
Colley, A. (2022) The consumer psychology of luxury brands: An in-depth look. Available from: https://ikon.london/articles/consumer-psychology-luxury-brands [Accessed 6 July 2024].
O’Sullivan, M. (2024) Get Your Bag: These Are the Handbags With the Highest Resale Values. Available from: https://www.vogue.com/article/bags-with-the-best-resale-value [Accessed 6 July 2024].
• Carla Seely has 24 years of experience in the financial services, wealth management and insurance industries. Over the course of her career, she has obtained several investment licenses through the Canadian Securities Institute. She holds ACSI certification through the Chartered Institute for Securities and Investments, UK; QAFP through FP Canada; and AINS through The Institutes. She also has a master’s in business and management
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