This designer handbag outperformed the S&P 500 in value growth | Things to know

Luxury handbags, like the Hermès Birkin, have shown a 14.2% annual value increase from 1980 to 2015, surpassing the S&P 500's return.

Designer handbags, especially ones like the Hermès Birkin, have grown in value annually by 14.2% between 1980 and 2015, while the S&P 500 index delivered an average annualised return of just around 10%.

A Hermes Birkin bag in a window display at a KaDeWe department store in Berlin, Germany, on Friday, Jan. 3, 2025. (Yen Duong/Bloomberg)

These bags currently retail for about $9,000 and up but can resell for $30,000 or more, depending on their size, colour and condition, CNBC reported.

Such luxury handbags, also from other brands such as Chanel, Goyard and Louis Vuitton have even outperformed some other collectibles in the recent years and are increasingly being seen as a potential investment category.

Even global investment banking giant Credit Suisse had said in a 2022 study that handbags are among the least volatile of collectable assets, offer a good risk versus reward, and are also proven to be a worthwhile hedge against inflation.

Meanwhile, according to the report, gold, which is known worldwide as a safe-haven asset, delivered an annualised return of just 3.4%.

However, just the Hermes Birkin and a small group of other top designer bags have value retention rates nearing 90% or higher, according to the report which cited luxury resale site Rebag.

However, there is a negative side to all of this too.

“In order to appear that you are in your place, you have to look a certain way, and that grooming can cost more for women, and they are doing that at a lower pay,” the report quoted Jasmine Tucker, the National Women’s Law Center’s vice president of research, as saying.

Even Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida, told CNBC that “It grosses me out when I see purchases positioned as investments, it hits me the wrong way.”