The Investment Potential of Ultra-Rare Luxury Goods

Luxury items like handbags, watches, jewellery and even classic cars offer instant gratification in the form of owning an exceptional piece that can be enjoyed while it appreciates in value. But it is not just the items themselves that are exceptional – chosen with care, they can be incredible value stores that do not follow market fluctuations.

A key detail in choosing investment pieces is the scarcity of the item. Besides craftsmanship and quality, this is one of the top factors that influences the value of luxury goods such as handbags and fine jewellery. Desirability often increases as prices rise, making ownership even more exclusive and driving the value up further.

Among the most sought-after handbags for collectors are the Hermès Birkin and Kelly. The Birkin handbag was first introduced in 1984 and it is one of the most coveted bags today with demand far outstripping supply – some customers can wait up to six years for an iconic bag in their choice of materials or colourway. A tightly-controlled supply and limited number of pieces made each year mean that the most popular handbags are only sold to a select list of customers.

Hermès Birkin bags have an average increase in value year on year of 14.2%. Since its creation in the 1980s, the Birkin has never fluctuated downwards, unlike markets such as gold, and has seen incredible surges in value such as a 25% increase in 2001. In 2016, a Hermès Himalayan Birkin bag, with white gold and diamond trim, sold for a record-breaking $372,600.

Hermès Special Order handbags are also highly-coveted, making them a similarly worthwhile investment. They can be customised to create a fully bespoke piece and each design is submitted to Hermès for approval before production can begin. This service is only offered to a small number of qualified clients each season, with bespoke creations often taking between six months to a year to produce. Known as HSS or Horseshoe Stamp bags, these feature a special horseshoe foil stamp inside the bag. This small detail shows that the bag was created via the a-la-carte process and significantly increases its value.

When it comes to timepieces, the legacy of the brand is an important element that can guide the value. Desirability usually rests on history and reputation, along with the stories behind certain watches. Timepieces by Patek Phillipe, a brand that is almost two hundred years old, consistently sell for three to four times their retail value. In fact, the competitive marketplace means that it is not surprising to see watches being sold for millions of dollars – in 2022, a Patek Phillipe Ref 2499 fetched $7.7 million at auction. Rolex continues to remain one of the best-known timepiece-makers. The brand’s reputation for both beauty and accuracy means that the top Rolex watches have a yearly return of around 10%.

While timepieces are prized for being stunning pieces of machinery, jewellery is coveted as a wearable piece of art. The demand for diamonds keeps growing, however, emeralds, sapphires and rubies are also popular. The value of these gemstones is elevated in accordance with their quality. Collectors of fine jewellery favour superb designs and materials but provenance plays a part here, too. The interest in vintage and antique pieces from prestigious brands such as Cartier and Van Cleef & Arpels means that they consistently generate excitement at auction.

One of the biggest challenges for individuals hoping to invest in luxury pieces is that exclusive items are allocated to a brand’s top buyers and can quickly sell out.

At Knightsbridge Property & Lifestyle Management, our extensive network of trusted partners provides us with unprecedented access to ultra-rare, sold out or limited-edition pieces, from the most sought-after luxury handbags to the rarest fine jewellery and watches. Whether our clients are searching for a Patek Philippe Nautilus watch or considering a Hermès Horseshoe Stamp handbag, they trust our expert team to source authentic hard-to-find fashion and collectables