Should you buy a Dh100,000 handbag as an investment?

Could buying that really expensive watch or handbag or limited-edition pair of sneakers actually be a smart investment? Many people seem to think so.

Spending Dh150,000 on a Rolex Day-Date, or Dh100,000 on an exclusive Hermes Birkin handbag might seem extravagant – but what if that watch or handbag goes up in value the longer you hold onto it? That would make it a smart investment, right? Many luxury goods appreciate in value over time as they become sought-after collector’s items. The trick is choosing the right ones.

When it comes to investing in luxury goods, watches are a tried-and-tested route. Premium brands like Rolex and Universal Geneve have been some of the best performers in this sector. You can look for either new product releases you think will become collector’s items or buy vintage watches that have already risen in value, but with the potential to go higher. Renowned brands like Rolex, Patek Philippe, and Audemars Piguet are particularly notable for their timepieces that not only retain but often appreciate over time.

Vintage watch expert Eric Wind, owner of Wind Vintage, says: “Focus on condition rather than rarity as great watches in good condition are hard to find, are easier to sell, and are more likely to appreciate”. Most modern luxury watches are down significantly from their peak in early 2022. “However, Rolex is pretty stable overall and sort of like the S&P 500 — not likely to skyrocket suddenly, but very liquid and solid in terms of values”.

Some of the most obscure and exotic vintage brands like Universal Geneve, which is in the process of restarting, have appreciated more than anything else. “Certain independent watchmakers are treated like living artists,” Wind said.

He advised investors to cut through the hype and noise that you experience in any luxury goods market to find what is truly valuable and uncommon. “There are a lot of Frankenstein and fake watches on the marketplace, so it is important to buy from a trusted seller who is known and trusted in the marketplace.”

B ag it

The luxury handbag market is a thriving segment of the consumer goods industry, driven by the desire for highend fashion and the growing working women population seeking financial freedom, according to Technavio. There is a lot more research now on luxury handbags, an alternative investment that has only become popular in recent years.

Rebag’s Clair Report found that the Hermès Sellier Birkin bag was 2024’s standout investment piece, boasting a remarkable 250 per cent value retention, the highest gain of the year. It surpassed the second-place Hermès Kelly Mini II at 150 per cent value retention.

Knight Frank’s annual wealth report looks across the collectibles sectors, including art and vintage cars, and found that handbags were the bestperforming luxury good last year. According to Sebastian Duthy of Art Market Research, “The ultimate classic handbag, the Hermès Birkin in black Togo leather, is now more valuable than ever when sold on the secondary market.” Iconic pieces from brands such as Hermès, Chanel, and Louis Vuitton are not only fashion statements but also appreciating assets. But the Hermès Birkin collection has cornered the market in terms of exclusivity and capital appreciation. For example, a rare Himalayan diamond Birkin bag sold at auction for over $380,000 (Dh1.3 million), highlighting how valuable top-end handbags have become. For those wanting to become handbag investors, experts advise to choose timeless styles. This means opting for classic designs in neutral colours, which tend to retain value better than trendy pieces. While there is an obvious temptation to show off your new handbag, you need to maintain its condition, including its original packaging and authenticity cards, to maximise its resale value.

People are now adding popular Labubu characters to luxury handbags to give them a playful, personalised twist.

Sneaker heads

Much like handbags, sneakers have seen an explosion in popularity as a collector’s item and alternative investment. The sneaker resale market has experienced significant growth, with projections estimating it will reach $30 billion by 2030. This surge is driven by factors such as limited releases and brand collaborations which is driving demand. Platforms like StockX and GOAT have fuelled this growth by providing marketplaces where rare sneakers can be bought and sold, sometimes at prices multiple times their original retail value.

While Nike and adidas have dominated this space, new players like Hoka, Salomon, On Running and Asics are seeing more interest. Drew Haines, director of merchandising for sneakers and collectibles at StockX, says: "We're seeing a much broader landscape. Sneakerheads are no longer fixated on just two or three traditional brands. Now, they're considering 10 to 20 different brands as collectible."

Ali Khalifeh is the Managing Partner at Youbetterfly in Dubai Mall, which sells exclusive sneakers. “We still see opportunities and a lot of demand on some hype items, especially if it’s a collaboration with a hot artist like Travis Scott,” he says. Shoes, accessories, collectibles and the street-wear industry are all booming and in hot demand.

Brands like Nike and adidas have realised that you can’t simply increase your supply and expect people to buy your products. “People want that exclusivity, that limited drop, and this year they are changing their direction again,” says Khalifeh.

The most recent brand/artist collaboration saw Nike partner with rapper Travis Scott and Barcelona FC, while adidas teamed up with Bad Bunny this year for a ballet-inspired twist. Kim Kardashian, who has her own sportswear brand, is working on a NikeSKIMS range.

One of the complaints sneakerheads often have is that limited-edition shoes are hard to buy as computer bots game the queues and buy up all the supply. Brands have been trying to tackle this with their own software and limiting the number of products per account.

So, what can you do to make sure you secure a pair of must-have exclusive shoes? Youbetterfly’s Khalifeh says: “We have a solid network of individuals and suppliers from within the community who have been with us since day one. The beauty about the resale business is the hustle and the grind and the human connections, as your deals don’t happen with brands or distributors, your trades happen with individuals and that’s a win-win for everyone.”

Technology and online communities have revolutionised how sneakers are bought and sold. StockX’s Haines spoke about Discord’s "cook groups" which have become crucial information networks, where enthusiasts share drop details, potential profitable releases, and strategies for securing rare items.

Like handbags and watches, being in perfect condition is crucial, or “deadstock” as sneakerheads like to say.

Travis Scott has collaborated extensively with Nike and the Jordan Brand, resulting in over 30 unique sneaker releases across various models and colourways. This collaboration has resulted in some of the highest prices – a pair of Travis Scott x Air Jordan 1 High OG ‘Mocha’ launched in 2019 now sell for more than $3,000.

Whether you are buying rare sneakers, luxury handbags or expensive watches, authentication remains a critical challenge. Platforms like StockX are investing heavily in verification processes to combat increasingly sophisticated counterfeit operations.