The luxury handbag market continues to grow in stature attracting a new and younger group of collectors, resellers and dealers.
Brands and models are key for price evaluations, as is the condition and the rarity of materials. The use of precious gems together with unusual skins like alligator, crocodile, ostrich and lizard tend to fetch the highest prices and hold their value.
Interest has evolved in parallel with the growth of eCommerce and social media and the secondary market for handbags is a fiercely fought bazaar. The growing number of auctions taking place online has opened a doorway for new players to join in, which accounts for the top auction houses seeing sales quadrupling between 2012 and 2019.
Handbags serving as a passion asset first made headlines with the auction of Christie's Coco Chanel collection in 1978, and was cemented at Christie's Elizabeth Taylor auction in 2011 when a set of Louis Vuitton luggage, each with its own purple luggage tags that said, 'MINE!', had a guide price of $3,000-5,000 but sold for $110,500.
Handbags are now recognisable status symbols. Victoria Beckham reportedly has a collection of more than 100 Hermès Birkin's thought to be worth more than US$2 million, whilst Singaporean entrepreneur Jamie Chua is thought to have 200 Birkin's in her collection.
Established in 1991, ILS World's private client team is experienced in working with clients who include collectibles as part of their investment portfolios, providing advice on trust and specialist company formation as tools to safeguard these pieces for owners and future successors.
Before the term passion asset had been coined, Hermès began cultivating desire and exclusivity for its merchandise. The brand started life as a Paris harness workshop in 1837. The Sac à Dépêches was designed by Émile-Maurice for his wife in 1935 and renamed the Kelly in 1977 after Princess Grace of Monaco. The Constance arrived in 1959 and the Birkin, named after the actor and singer Jane Birkin, in 1984.
Each Hermès bag is a painstaking labour of love, entirely hand crafted so no two are the same, they carry the distinctive saddle stitch the design house has become famous for. A Kelly bag comes in eight sizes (Kelly 15, Kelly 20, Kelly 25, Kelly 28, Kelly 32, Kelly 35, Kelly 40 and Kelly 50) and the number in the bag's title refers to its width. A Birkin comes in four different sizes – 25, 30, 35, and 40. The main difference between the two is a Kelly has one handle plus a shoulder strap whereas the Birkin has two handles and no shoulder strap.
The high prices demanded for passion assets, such as the Hermès bag, is also down to limited availability. The total number of Birkin's produced each year is a well-guarded secret, but it's estimated there may be around 200,000 in circulation. The rumour is that waiting lists are a thing of the past as the demand for a Birkin and a Kelly outstrip supply. Only those with close, personal relationships with boutique staff will be informed when one becomes available and not necessarily in their preferred colourway or finish. Rarer editions will only be offered to a very select group of VIPs group which is why the resale market is so strong - a Himalaya Niloticus Crocodile Retourné Kelly 25 sold at auction by Christie's for HK$3.4 million last year.
Although Hermès is the focus of many collections, Boarini Milanesi unveiled a US$7 million bag last year to raise awareness of the need to protect our oceans. The personalised Parva Mea is made-to-order and took the crown of the most expensive bag in the world from the US$3.8 million Mouawad 1001 Nights Diamond Purse.
The ILS World private client team has a great deal of experience supporting many passionate collectors, and as such, has become experienced in partnering and working with external accredited experts and acknowledged industry professionals to ensure our clients receive the best advice.
We are used to working with authentication experts who know the only papers that come with a Hermès handbag are CITES accompanying exotic skin bags. We work collaboratively with specialists who can interpret brand stamps and recognise genuine hardware and through our network of global contacts we liaise with specialist valuers, insurers and storage advisers to ensure leather isn't suffocated which can lead to cracking and long-term damage.
The ILS World team is made up of highly trained and experienced professionals assisting clients with:
• Multi-jurisdictional company incorporation
• Establishing and administering a trust
• VAT and Customs compliance
• Comprehensive administration of the ownership structure
• Management and financial reporting
• VAT and accounting services
• Provision of directors, registered offices and registered agreement/company secretary
• Acting as a trustee
• Import and export services
• Maintenance and upkeep
ILS World is a global provider of independent fiduciary services who successfully advise private clients including individuals, trustees and family offices.
We act in the long-term interest of our clients and pay careful attention to the quality and personal service we deliver.
Our private client team works hard to create long-term relationships and provide the highest level of service. We do this by being approachable, flexible and pragmatic. We offer regular face-to-face meetings as required and provide direct contact with a senior member of the team. Staff have diverse backgrounds, skills and interests and their professional experience together with their "can-do" attitude means they understand that wealth and business is inextricably linked.
Our private clients often require an international strategy and as a global business with offices in several key jurisdictions we are well-placed to provide a cohesive service. Our network includes offices in:
• British Virgin Islands
• Hong Kong
• Isle of Man
To find out more about how we work with clients and provide independent advice for luxury asset protection, then please visit our website.
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This article is part of the ILS Private Client Series, a collection of commentaries originally generated in response to specific enquiries by individual clients. We have amended this briefing on watches to enable us to share it with a wider audience with similar interests. Read the full compendium on our website by clicking here.
Please note: ILS World does not offer tax advice and would therefore recommend you obtain your own tax advice. If you require an introduction to a tax adviser we would be happy to assist.