Bags of Money

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Known more for her unremitting love of Manolo’s than her savvy business choices, Carrie Bradshaw once quipped the now iconic words, ‘I like my money where I can see it, hanging in my closet’. Whilst one may be forgiven for thinking that these were the words used by a self-confessed shopaholic to justify their latest splurge, Bradshaw was in fact showing some major foresight. In a recent study conducted by the online bag platform, Bag Hunter, a Hermès bag, one of fashion’s most sought after luxury items, has proved to be a safer investment than either gold or the stock market. So, for those of you more economically minded, now might be the time to put down your copy of the Financial Times in favour of the latest issue of Vogue in the quest to make your fortune.

This latest study compared the annual return of S&P 500, chosen to reflect the overall return characteristics of the stock market as a whole with gold, the most popular commodity for investors, and a Hermès Birkin bag, a collectable bag most of us can only dream of owning. Whilst over the thirty five year period from 1980 to 2015, the S&P 500 returned a nominal average of 11.66%, with gold only producing a 1.9% average annual return, the Birkin bag offered an average annual value increase of 14.2%. In other words, the Birkin bag has experienced a 500% value increase since it was first produced in the 1980s, after a chance meeting between Hermès chief executive, Jean-Louis Dumas, and the ultimate fashion darling, Jane Birkin. Moreover, whereas the S&P 500 and gold were liable to fluctuations on the market, the value of the Birkin bag only ever saw a steady increase in price. As the value of Hermès’s prized creation is set to double in the next ten years, now is the time to make like Carrie Bradshaw and start investing in your wardrobe.

With such impressive stats as these, what is it about the Birkin bag that has all the fashion aficionados scrambling for their purses? More than just a classic design, the Hermès bag is the ultimate symbol of luxury fashion and therefore status. With a never ending waiting list, Hermès prides itself on its elite clientele. Merely being able to afford the hefty price tag which can vary from anywhere between £8000 up to £100,000, is simply not enough. Only those who have had a long standing relationship with the brand will be considered, and even then buyers have little choice in the colour or size they receive. It is this constant imbalance between supply and demand which makes the Birkin bag a solid investment. Auction houses become popular sites for collectors and fans alike who swap, sell or buy this hot commodity.

All this begs the question, is luxury fashion really worth it? Is a seventy pound plain white Alexander Wang V-neck T-Shirt justified, does a one thousand three hundred pound Burberry trench coat stand out against Zara’s latest offering and does a five hundred pound pair of Louboutin shoes really make you walk a little taller? Or does luxury fashion simply represent society’s frivolous want? Whilst many of us may not be in a position to simply walk into Louis Vuitton and start spending money like it’s going out of fashion, there is something to be said for spending more on less. There is no question that an Alexander Wang T-Shirt will hang better on your frame than Primark’s one pound offering, or that the quality of cotton will feel soft against your skin compared to the scratchiness of a cheaper purchase.

So if money is simply no object, it pays to invest in staple pieces that will stand the test of time. If a Burberry trench is within your budget, its classic tailoring and perfect beige tone will always be an item to desire which will take you from season to season and generation to generation. Its use of gabardine fabric, known for its weatherproof and breathable qualities, will make it a safer bet than Zara’s polyblend version. And as for those Louboutin’s, the extra time taken to create its perfect shape will elongate your legs no-end, whilst its high-quality leather will last way beyond the end of the night.

For those of us on a much scaled down budget, spending more on fewer higher priced items at Zara or Mango can be just as effective. Whilst the quality of material may not be at the top of ultimate luxury, it is infinitely better to buy one jumper from Zara which hangs that little bit better, boasts a better choice of colour and which is potentially that little bit warmer than buying three jumpers from Primark which often have that unwanted bit of detailing. By investing more in your wardrobe, even if it doesn’t bring in the same revenue as a Birkin bag, the possibility of saving money in the long run is much greater. Whilst there is no harm in padding out your wardrobe with more purse friendly purchases, luxury fashion, whether on a budget scale or not, is less frivolous and more sustainable than the quick fashions churned out by H&M and co. At a time when fast fashion production is at its max, it pays both economically and ecologically to invest more in less.

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