'We're auction experts - this £100 item in your wardrobe could fetch thousands'

Some things never go out of style – and a designer handbag is one of them. But did you know this flashy fashion essential now wields significant power to boost your wealth?

Industry insiders say luxury purses, clutches and holdalls have become one of the hottest investment opportunities at auction houses – from Céline to Chanel and Givenchy to Gucci.

An eye-boggling £38.9billion of secondhand luxury goods were sold worldwide last year, with the resale market doubling in just four years.

And it’s high-end handbags that are particularly going “bananas” at sales, says Meg Randell, head of designer handbags and fashion at Bonhams – one of our oldest auction houses having been founded in 1793.

I’ve been invited to find out for myself with a recent visit to the exclusive Allbright Mayfair Members’ Club in west London where Randell is holding court with a full room of chicly clad, captivated women about the new kid on the fashion block. She says luxury bags have been “performing really well over the last five or six years”.

And that’s because with the right knowledge and homework, buyers can bag a bargain for as little as £100, netting themselves thousands of pounds in profit.

It’s a message that 29-year-old Francesca “Frankie” Smith, a certified financial planner and founder of wealth management company FSWM, wants to spread like wildfire among savvy women looking for a new way to invest.

After launching her own networking group in 2021, she co-founded a monthly investment club with Allbright where she hosts popular monthly tutorials to help women “dissect the jargon” of the financial services industry.

At this latest meeting held in the lavish five-storey club nestled discreetly in upscale Maddox Street, the atmosphere is sophisticated yet inviting. Every seat in the bright room is taken. And all eyes are on Randell as she tells Smith about a customer who brought a collection of Chanel handbags to her previous workplace in London 12 years ago.

“I was working for a small auction house in Chelsea as a ‘smalls valuer’,” she explains. “I valued anything that wasn’t art, jewellery or furniture. Someone turned up with this big collection of Chanel handbags and said ‘Can you sell these?’ And I thought, I don’t know that much about Chanel. I was really scared.”

Despite her nerves, she recognised a good opportunity and said yes. But she had to do her research before attempting her first listing.

“I had to teach myself how to authenticate the bag, and we put them through auction and it went bananas,” she says. “Everything sold. It was so good. So I thought, let’s keep doing this.”

Randell went on to run the handbags department at Chiswick Auctions before being scouted by Bonhams to run its department, which is one of the “fastest-growing” in Knightsbridge.

Speaking to me, she says: “There wasn’t even a department until I came in 2020 so it’s exciting. Ten years ago there weren’t many auction houses selling designer handbags. But nowadays, nearly all the good auction houses have handbag departments.”

Many women have wish lists of the designer accessories they one day hope to own from the Gucci Jackie 1961 to the million-selling Fendi Baguette popularised by Carrie Bradshaw on Sex And The City. When Kate, Princess of Wales, made her triumphant return to public life this month at Trooping the Colour 2024, she carried a suede Mulberry clutch, a favourite of hers for years. And Randell has a story from her wardrobe few could rival after landing an original Hermès Birkin once owned by Jane Birkin.

“A woman who lived around the corner from us in Knightsbridge got in touch having bought this bag in a charity auction on eBay 15 years ago. The bag was being sold by Jane Birkin, one she herself had used,” she explains.

Jane Birkin became the namesake and muse of the world’s most famous handbag in 1983. The chic British-French actress, who for a decade was the romantic partner of Serge Gainsbourg, was aged 33 when she boarded a flight from Paris to London and, unbeknown to her, sat next to the chief executive of Hermès.

As Birken attempted to put her straw travel bag in the overhead compartment, its contents spilled to the floor. The star shared her frustration at being unable to find a leather weekend bag that was big enough to accommodate her needs. The pair sketched out the design for the Birkin during the flight and fashion history was born.

“The bag came out in 1984 and every few years Hermès would give Jane one of their bags,” says Randell. The bag she had was from 1999 and it may have been the last Jane regularly used.

Randell says Jane “used to let her cat sleep in it. The handles literally had bite marks on them. The corners were gone. It looked like it had been run over.”‌

Unsure of how to estimate the starting price owing to its “terrible” condition, Randell decided on an “attractive ‘come and get me’ estimate of £20,000 to £30,000”.

Her idea worked. “On the day, we had four telephone bidders,” says Randell. “We had one in the UK who dropped out at £30,000. We had one in America who dropped out at £50,000. And then we had two in Asia who fought it up to £120,000.”

The figures are incredible but an initial investment needn’t cost an arm and a leg. If Randell had £1,000 to invest, she would opt for a £100 Louis Vuitton handbag on the secondary market.

“I’m a big fan of Louis Vuitton bags,” she explains. “They are some of the best quality bags and are usable. I love a Birkin, I love a Kelly. But they’re not easy everyday bags. Get a nice Louis Vuitton, use it nicely and it will hold its value.”

Anyone can buy at an auction, she adds. “The first time can feel a bit confusing but once you get the bug you will love it.”

Before I leave, Randell points to a spread of colourful Hermès Birkin and Kelly bags she has brought with her to be auctioned soon, varying in sizes from 40in to a smaller 25in.

“People are looking for the small ones at the moment,” she says. “The starting price is £5,000 for each of them, which obviously isn’t cheap, but for resale it’s quite a reasonable price.”

What do auction houses look for in a handbag? 

Meg Randell: "If it's Hermès or Chanel, we can definitely sell it. If it's Louis Vuitton, we can sell it. If they're good versions of the other brands, we either can or we can't. Condition is key - if you've got the box, the dust bag, the original booklet, certainly if you've got the authenticity card, people like it. If you have all the accessories, keep them and look after them but it's not a complete deal-breaker."

How can you check the originality of a designer handbag?

Meg: "Look at all the materials, their quality and the stitching. Often it's little things like the font that's wrong."

Why should people invest in handbags?

Meg: "What's nice about bags is that you buy something you love. If you use it carefully, you will get a lot of enjoyment out of it and hopefully make a good return out of it. The trend is going upwards - maybe not as sharply upwards as from a few years ago - but it's performing well."

Frankie' Smith: "You want to build a strategy in which you use all mainstream investment elements such as ISAs, pensions and tax planning vehicles. Once you've done that, start to think about how you can put your money and bits of interest. Just make sure that you're not putting too those satellite investments [specialised investmme investments with higher risks and returns]."

Learn more about selling handbags at auctions by visiting sell.bonhams.com