‘Collectable Handbags’ top the Knight Frank Luxury Index

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Mar 6, 2020

‘Collectable Handbags’ top the Knight Frank Luxury Index

With 13 per cent annual growth ‘Collectable Handbags’ take the top spot in the Knight Frank Luxury Investment Index

Knight Frank

Russian collector Julia Kovaljova and her collection of Hermes handbags

The Wealth Report 2020, released by Knight Frank, exclusively reveals that new entrant ‘Collectable Handbags’ has topped the Knight Frank Luxury Investment Index (KFLII), rising in value by 13 per cent over the 12 months to Q4 2019, knocking rare whisky off its number one position.

In the first index dedicated to tracking the burgeoning market for collectable handbags, Art Market Research (AMR), which supplies much of the data for the Knight Frank Luxury Investment Index, delves into the world of this emerging asset class.

For KFLII, we focus specifically on collectable handbags made by Hermès and reveal that prices have more than doubled in value over a 10-year period (108 per cent growth).

“It’s only been possible to create an index on handbags now because of the frequency with which many iconic pieces are coming to auction today," said Sebastian Duthy, Director, Art Market Research.

"Although bags made by other luxury brands like Chanel and Louis Vuitton are also highly collectable, it is those made by Hermès that attract the highest prices and are considered the most desirable.”

The index results show that on an annual basis handbags outperformed both whisky and art, which both recorded growth of 5 per cent.

Knight Frank Luxury Investment Index (KFLII)

Luxury Asset Annual Change 10 year Change

Handbags 13% 108%
Stamps 6% 64%
Rare Whiskey 5% 564%
Art 5% 141%
Watches 2% 60%
Wine 1% 120%
Furniture 0 -27%
KFLII -1% 141%
Coloured Diamonds -1% 86%
Cars -7% 194%
Jewellery -7% 90%

Source: Knight Frank

Classic cars, another strong performer in recent years, slipped 7 per cent.

Overall, the KFLII, which is a weighted average of each asset class, fell by 1 per cent.

However, when we look at the results over a 10-year period, it is a different picture.

Rare whisky continues to top the charts rising 564 per cent followed by cars (194 per cent).

rare_whiskey_2.jpg

While rare whiskey rose by 5% in the last year, it has gone up by 564% in the last 10 years for collectables. Source: Knight Frank

KFLII rose by 141 per cent.

Knight Frank’s Joint National Head of Private Office Sarah Harding said the Wealth Report Attitudes Survey 2020 found UHNWIs currently allocate around 5 per cent of their portfolio to collectables.

“The results of the survey reveal that most UHNWIs are planning to retain or increase their allocations to luxury collectables, which is no surprise with impressive returns on offer,” said Ms Harding.

“Ultra-wealthy investors from the Middle East and Europe are leading the charge in growing demand for collectables, while nearly all of the Australasian investors are expected to maintain the same exposure to this asset class.

“As luxury collectables continue their rise up the investment agenda, a growing number of fledgling UHNWI collectors are making their first forays into the world of auction sales, which can be an art in itself.”

“As with other investments of passion like rare whisky, whose value has risen sharply in recent years, handbags are increasingly being seen as an investment class in their own right, as well as highly desirable fashion accessories," said Andrew Shirley, Editor of The Wealth Report and the Knight Frank Luxury Investment Index.