In an economic downturn, many consumers take stock of what’s valuable and efficient for their budgets. The current economic climate can be a deterrent to investing in luxury items, but it could be one of the better investments to make right now. When we think about luxury handbags, we often think about the hefty amount of money we’re investing into the product. As of late, though, a different discussion has dominated the conversations in the luxury handbag space, and that’s the idea of resale.
It’s a burgeoning market, with secondhand companies seemingly sprouting up everywhere. To understand the resale conversation though, one has to understand the importance of the luxury handbag sector. Not surprisingly, handbags and small leather goods (SLGs) are the unsung heroes of your favorite heritage brands, driving the majority of sales at the world’s biggest names. According to a BoF report, global luxury giant Hermes attributes roughly 46% of its overall revenue to handbags and SLGs, whereas Prada sits at around 50% and Gucci nets out around 53%. For smaller or newer houses, the percentage grows higher, with Kate Spade at 78%, Coach at 72%, and houses like YSL and Bottega sitting at 71%.
This escalation strategy, typically deployed by heritage brands but quickly catching on with smaller brands, allows for more client acquisition and escalation. In the fashion world where the objective is volume, this strategy is an effective model to stay relevant, partially regarding the younger generation.
In an industry that’s predicted at $100 billion in 2026, brands are competing to own the market for luxury handbags, including owning the secondhand market. ‘Investment bags’ are quickly becoming a popular topic of conversation on Rihanna's internet. According to a Bloomberg report, luxury handbags are becoming a hotly sought-after investment commodity, a trend driven primarily by Gen Z and millennial shoppers. The return on investment (ROI) can be profitable, especially in this $72 billion market of luxury goods; one just needs to know where to look.
Fashion insider or not, chances are you already know about the retention rates of brands like Hermes and Chanel, but what about the other brands? Keep reading for tips on the best luxury handbag investments, including the ones to look out for!
Due to the record-breaking success over the last several years (specifically the last two), Dior handbags are quickly gaining stock in the resale market. The trajectory of the brand is based on culture-obsessed designs and modern twists on classic silhouettes.
Louis Vuitton, an unsung hero on the resale market, retains 80% of its value if taken care of. The French house has an incredible market share in handbags, with offerings across a variety of price ranges, encouraging brand loyalty as customers continue to invest in the luxury handbag market.
An unexpected house that has dominated both the luxury and secondhand markets, Bottega Venetta has skyrocketed into one of the most buzzworthy brands, season after season. The brand has seen significant growth since 2019 and is up 12% vs 2020; a feat hard for designers in the post-COVID world. With that, new bags are expected to have a retention rate of 85% - an incredible ROI for any brand but especially for newer brands like Bottega Veneta.
Cassette (Belt Bag or Chain Strap)
With the resurgence of Y2K comes the rebirth of nostalgic silhouettes and textures, and one bag stands out among the rest: The Fendi Baguette. Featured in the cult series Sex and the City, the baguette has reached a rockstar level, FENDI re-released the bag in an array of styles, colors, and shapes. It solidified its superior place on the resale market hierarchy by being coveted by millennials and Gen-Zers alike.
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