HOW TO CAPITALISE ON THE RISING COST OF LUXURY
On the facade, the economy is suffering as a result of COVID. It’s therefore impossible to wrap it up in a single sentence, and so I’ll spare you the feeble attempt. Talking about the fashion industry specifically, well, that’s one thing I can do.
The abrupt halt of supply chains, manufacturing and the ability to source raw materials is by far one of the biggest threats the industry has seen for the best part of 2020. Prices elevate, but the quality does not necessarily follow suit. Precious materials like Calfskin and Lambskin simply aren't available, and decisions are being made on the best way to address a market that yearns for whimsy, newness and some exquisite escape from the abnormality we are strangely becoming accustomed to.
As Italy suffered greatly at the hands of the pandemic, there was almost no light at the end of the tunnel from one of the luxury sector’s most extraordinary inhabitants. According to McKinsey, “more than 40 per cent of global luxury-goods production happens in Italy—and all the Italian factories, including small, family-based façonniers, have temporarily shut down.”
Threatening more than pricing, the very fabric and lineage of luxury craftsmanship itself hung in turmoil. Italy’s façonniers, a rare breed whose duty it is to protect the heritage of excellence and skill, could be compromised as the very essence of what “Made in Italy” means to us today, dwindles.
Chanel stated that their prices have increased due to limited purchasing of certain raw materials. To understand the significant hike, a new Chanel Jumbo Double Flap priced at $6,400 (as of 2019) has increased to $7,100. The full list of price increases paints a much clearer image of unforeseen inflation that has hit the brand.
Not too dissimilar from Chanel, Louis Vuitton’s prices have been steadily increasing since October of last year, and it appears the rise is likely to accelerate. Supply chain restraints and lower sales overall, particularly in the U.S. and in Europe are significant factors, whilst spending on these products has accelerated in some Asian countries, including China.
So where’s the good news in all of this?
The market for new products is undoubtedly at the top end of the purse-string scale, but your closet may have the solution. Existing pieces are becoming more valuable by the moment. That’s right, any bag you buy or currently own will likely continue to rise in value. In that sense, a luxury handbag is a better investment than it’s ever been. So if you’re looking for superior quality and a more attractive price, thinking about pre-owned pieces is the right avenue to consider.
Our motto? Experiential luxury.
Another perspective on “shop, sell, repeat” to meet the times amid one of the fastest-growing sectors of luxury living has shifted. Even prior to the unexpected events of this year, consumers were seen to move from owning luxury to experiencing it as a realisation kicked in that trends are momentary, memories are forever.
Remember the days of fancy AirBnB getaways and rent-the-runway options? Social media moments that suited their fleeting nature were a phenomenon, but not one we should turn away from entirely. And not when there are good investments to be made and a readily available way to resale them.
Much of FASHIONPHILE’s clientele has caught on. Their closets transform as the latest must-have bags are sold to make space for a new one. The savings are undeniable. Now, buying is a smart move, and no longer is one committed to a bag for eternity - though that wouldn’t be the worst thing in the world.
THE BIG TAKEAWAYS
• Buying pre-owned is likely to get you the best luxury items at the best price, but it’s advisable to buy soon as when brand costs increase, the resale value will as well.
• If you need to make fast cash, selling your bag now will get you more than it would have earned previously.
• Be informed that luxury items are likely to appreciate so don’t worry about a future cash loss if you’re not quite ready to let go of that handbag just yet.
• In the spirit of experiential luxury, don’t be afraid to invest, sell, and re-invest in something new-to-you. You may very well even make a return in the process.