Handbag Hysteria – From Investment Bags To It Bags

Princess Grace uses her crocodile Hermès bag to shield her baby bump in 1956, which led to the bag being re-christened the Kelly.

As economic recovery continues and recession recedes from memory, the rehabilitation of designer handbags has been advancing. During the boom designer bags were a brash badge of affluence and easy credit and the It Bag became emblematic of excess and conspicuous consumption. Sported by women across all ages and social backgrounds, It Bags became an obsessive competitive sport with every season bringing a new “must have” version with multiple chains, buckles and logos.  It was thought that expensive designer bags were tarnished by these associations, but now it seems that predictions of their demise were premature. 

In the UK the handbag market is worth in excess of £1 billion annually, while the global handbag market peaked just shy of $60 Billion in 2017.  Despite this, sales of designer bags are not guaranteed, as they were in the boom. As Tamara Sender, Senior Fashion Analyst has observed: “Retailers and designer brands need to adjust to a new reality where handbags are no longer a sure-fire revenue generator. However, focusing on newness, unique designs and customisable bags provides a way to encourage higher levels of purchasing.” 

So, while women may be slower to invest in expensive bags, they are still purchasing, particularly the luxury titans such as Chanel, Louis Vuitton, Gucci and Hermès. At its most extreme, the female fetish for bags has led to Japanese girls working as prostitutes to indulge their passion for luxury brands and to many other women maxing out credit cards for the pleasure of sporting a famous logo. Even the terrifying Mrs. Thatcher was a firm believer in a good bag and was responsible for the term “handbagging” entering the political lexicon. Mrs. Thatcher’s sartorial armour of stiff tailoring and even stiffer hair was completed by her traditional Asprey handbag, her firm grip on same being symbolic of her hold on power and Government.  

So why the obsession with handbags? 

Handbags strike a particularly emotive chord with women – not only are they a sort of home on your arm they also display your personal taste, level of affluence and even who you aspire to be. A handbag semaphores your style personality more accurately than any other element of your wardrobe. A classic luxury lover may wear Chanel, her bohemian sister Marni and a discrete lover of understated quality, Hermès. Even women who aren’t particularly interested in the vagaries of fashion will frequently be seen with a statement designer bag. In short bags don’t just contain our mundane stuff they also possess the ability to make women feel exquisitely happy. 

Upon closer examination, the designer bag market appears to have consolidated at two ends of the spectrum – at one, brands such as Michael Kors who have saturated the mid-section of the market and at the other the super exclusive luxury brands such as Hermès who rigorously limit product to establish their credentials as purveyors of the most desirable bags. The increasing presence of stealth luxury brands such as Céline, Valextra and Bottega Veneta has also heralded the emergence of a new handbag customer – one who is willing to invest thousands in a bag that they believe will last them a lifetime.  

Audrey Hepburn with her ladylike Hermès Kelly bag.

 The zenith of  investment bag acquisition, was the sale in 2016 in Hong Kong, of a pre-loved Hermès Birkin matte Himalayan bag with white gold fittings and almost 10 carats of diamonds for in excess of $300,000 at Christies auction house.  Christies has been including handbags in their sales since 2000, with twice yearly handbag sales in Hong Kong now established due to a growing demand for elusive styles, particularly Hermès Birkin and Kelly bags. As one collector, Emily Chan, who has more than 50 bags stated: “Birkins are like currency : you can cash them out at any time.” Hermès Birkins have climbed in value by 500% in the past 35 years and are projected to double in value in the next decade so exceed art, gold or even property as an investment.

 In Ireland the re-sale luxury bag retailer, Brand Connection (a Dublin and Paris based, online business that sells pre-owned designer handbags) holds regular sales events as well as retailing online. Their success suggests that the Irish are recovering their taste for luxury bags: items that have featured in Brand Connection’s  sales have included  an Hermès Kelly in Rose Crocodile  for €49,000,  an Hermès Kelly in Celadon Himalaya for €59,000, and an Hermès Birkin 30 in Orange Epsom for €10,680 as well a selection of bags from Chanel, Cartier and Louis Vuitton. In Dublin city centre,  Brown Thomas boasts a luxurious and recently expanded bag department along with concessions from Chanel, Hermès and Louis Vuitton while around the corner, Siopella Designer Exchange also does a very brisk business in all the major designer bag brands. They are extremely vigilant about the issue of authenticity and all stock is verified by Ella de Guzman, their Head Authenticator. With such high retail value, counterfeiting is a major issue across the luxury goods sector, particularly with designer bags.  

Bags that inhabit the most elevated echelons of desirability (as investment bags) are the Chanel 2.55, the Louis Vuitton Speedy, the Jackie O Hobo from Gucci and the Hermès Birkin and Kelly.  In truth, handbags are the financial foundation of the luxury goods industry, representing approximately 30% of total sales.  For the industry they sell more easily than clothes, enjoy extremely high full-priced sell-through rates and are easier to develop than perfumes. For the customer, they endure beyond single season trends, never need to be sized or tried on and give satisfying returns on a cost per wear basis. 

Handbags first achieved popularity with women in the early 20th century. In the first decades of the century the Suffragettes had agitated for the female franchise and after WW1 when this materialised, women became increasingly financially independent as they participated in the workforce and opened their own bank accounts. A bag was a very visible symbol of this new liberated status.  As the twenties heralded the arrival of  flapper fashion, whose slim silhouette necessitated a bag, handbags became established as a new fashion accessory. Cigarettes, lipsticks, powders and car keys signified the lifestyle of the new modern woman and a bag was essential to carry all these totems of emancipation. Pockets never had the same allure again. 

Once the female obsession with handbags was born, the luxury goods industry was quick to capitalise. Bags now form the centre-piece of most luxury goods brands –  the clothes are the window dressing for the industry but it is the accessories, cosmetics and perfumes that deliver the highest profitability. The profit margins associated with designer bags are astounding – generally priced between 10 to 12 times the manufacturing cost, Louis Vuitton even manage to sell their bags at 13 times the cost price. It is easy to see therefore why an It Bag can have such a profound impact on the financial fortunes of a company. 

Jackie Onassis with her favourite Gucci hobo bag which was soon known as the Jackie O. It has now been re-named as the Bouvier.

As the decades of the 20th century progressed many of the major luxury brands established their signature style motifs – In the 1930s, Robert Dumas of Hermès designed a handbag with a purist aesthetic that from 1956 on became known as the Kelly (when Grace Kelly shielded herself from the paparazzi with one),  in 1947 Gucci put the first bamboo handle on a bag (a cheap material in post-war Europe) and in 1955 Chanel produced its first quilted 2.55 bag. While many women’s accessories such as hats and gloves disappeared in the disruptive 1960s, the bag endured and the 1980s saw the revival of designer bags led by Chanel’s relaunched 2.55 under the creative direction of Karl Lagerfeld.

In the 1990s Prada ushered in the democratisation of luxury with the success of its nylon backpack. Here was a cool, minimal, modern bag for a design conscious generation that appealed to the middle market. The success of the backpack generated huge revenues for Prada and made the then unknown company a major fashion name. Later that decade, the Fendi baguette bag transformed Fendi from a fusty Italian furrier into a major luxury brand, selling over 100,000 units in its first year. As the ‘90s progressed and the noughties dawned, logo mania peaked with emblems such as Chanel’s interlocked Cs, Gucci’s linked Gs and the Louis Vuitton monogram resplendent on bags of all shapes and sizes. Bling and bad design resulted in some truly ugly bags until eventually the crash of 2008 seemed to herald the end of the It Bag phenomenon.   

After the financial carnage of the late noughties, conspicuous consumption seemed  tasteless and those who still had the means to indulge their penchant for luxury did so in a new way – stealth wealth emerged as the biggest trend of the 2010s. Logos that were ubiquitous had lost their cachet and  were replaced with identifying designer details that flew below the radar such as Bottega Veneta’s woven intrecciato leather or the Hermes’ lock and key closing. Suddenly the appetite was for items that were not mass produced and instead emphasised craftsmanship, creativity and exclusivity. As Lucia van der Post observed in the New Statesman: “Stealth wealth is not about spending less but the power and the swagger are subtler. It’s not a diminution of luxury or quality, merely a recognition of where it truly resides.”   

Hermès are considered the Rolls Royce luxury handbag label and their bags have graced the arms of royalty, celebrities and the super-rich for decades.  They are the antithesis of the It Bag – the house designs are established classics, the bags are all finished by hand, there are no ostentatious logos – everything about them carries a refined aura and they are the ultimate symbol of discreet wealth and success.  All Hermès bags are made in house by company artisans, and it is rumoured that any which fail their rigorous quality control standards are destroyed. This contrasts with many of the other luxury brands who have gradually moved manufacturing offshore to China and whose standards have diminished as a result. The Made in China labels on these expensive goods are often so well hidden that the client has no idea that their purchase has originated in a PRC factory and not an artisan atelier in Italy or France.  

For those who cannot afford to invest in a Birkin or a Kelly nor want the obvious branding of Michael Kors, the good news is that smaller discreet bags have increasingly usurped flashy brands in recent seasons. Brand fatigue with the ubiquity of major labels has led to the rise of alternatives including Mansur Gavriel’s plain but luxurious bucket bag, Everlane’s chic Porfolio bag whose sleek appearance belies its relatively modest price tag and new brand, Wandler which has an elegant distinctive aesthetic combined with a made in Italy pedigree. 

Whichever way the handbag market evolves into the future, one fact which is certain is that women will continue to covet them, brands will make large profits from them and we still won’t be able to contain our joy when we get a new one.  And if you feel guilty about indulging your bag fetish, remember a good bag can sometimes outlast a bad relationship. 

Jane Birkin with the Hèrmes bag named in her honour.