Considerations: Handbags aren’t dead. They’re an investible proposition. Just don’t call them an investment.
How the value proposition of a luxury handbag has changed and why you should be a more discerning consumer to get what you want and what you need
The New York Times recently published an article questioning whether handbags are dead. The article centred on handbags no longer being used as a status symbol of power or wealth. That the luxury handbag market is contracting due to incessant price increases and women are seeking alternative options to fit their lifestyle, with some of the most powerful women not carrying a handbag at all.
I looked into the editorial archives as this seems to be a question asked every 5 years or so. The It Bag era began in the late nineties: the Fendi Baguette, the Chloé Paddington, the Balenciaga City. A time when a recognisable design could command symbolic status. Then oversaturation set in, end-of-season sales proliferated, and owning a luxury handbag was no longer just for the privileged few. The It Bag was declared dead. What followed wasn’t the death of the handbag. It was the rise of the classic. The Birkin. The Kelly. The Speedy. The Chanel 2.55. Bags that didn’t chase a trend but held on to the brand’s heritage, satisfied the consumers it was worth the investment owing to the longevity of those designs. Seasonal colours yes, continuity of its design in future seasons, also yes. The handbag’s investible proposition recalibrated.
I remember when I first moved to London in 2006, and the It Bag concept felt like the entire language of fashion. Clearly we’re now having some sort of existential crisis when it comes to bags and how they orbit around us, or maybe us around them. But I firmly hold true that handbags are more important than ever, but for entirely different reasons and for an entirely different discerning consumer. Their investible proposition has shifted dramatically. And it’s recalibrating again now.
Earlier this week, I went shopping on Bond Street. I was there looking for a specific bag: a Chanel 25 in medium. Anyone who has tried to find one will tell you it is nigh on impossible. The sales associate at the first boutique I visited had one 25 in stock: a small, black caviar leather, gold hardware. I tried it on. It was gorgeous, perfection. I knew it would work in my wardrobe, I knew I would get use out of it, I knew it would bring me joy. For a split second I thought, I could buy it, and if I’m not getting the use out I expected, I can sell it for higher than retail. This is a sound investment financially but less so practically. I said no.
Later that afternoon at the Celine pop-up in Selfridges, I tried on a bag I was lusting after from afar. Oversized black leather bag with colourful straps. It was my favourite handbag from the Summer runway. But on my 5’5 frame, it was simply too large for everyday use. The sales associate suggested it could be the perfect travel bag. I still said no.
Both decisions were so clear to me, even with a friend imploring me via text to go back and buy the small Chanel 25 immediately. Even with scarcity, desirability and exclusivity, I cannot justify the spend if contextually I won’t sweat the asset, I won’t as much derive value out of it as I could another bag.
The discerning consumer now isn’t just buying handbags as a signifier of their wealth, their success, their proximity to luxury. Personally that has never once been my intention. I love the confluence of craftsmanship, materiality, design, beauty, heritage and practicality of a handbag. That’s why I adore the Chanel 22 medium, and how I’ve derived a huge amount of value out of it as an investment in my wardrobe. Not a financial investment, but an investment to derive value from the joy, the practical use cases it provides me, its quality.
Métiers d’Art collection launched yesterday (4 June), apparently with 5 hour queues outside Bond Street. This mania risks the discerning consumer getting swept up and buying something expensive for all the wrong reasons. That’s why I said no to the small 25. Yes it’s a holy grail bag, and yes I would use it. But I would use the 25 medium twice as much. When I explained my rationale for saying no, my sales associate reacted as if I had suggested the most radical thing: I don’t want to collect beautiful bags, I want to use them.
Spend your money on the things you use every day. Don’t save for best. That philosophy also appears to be a huge driving force in the market.
The Numbers Tell a Story
The global handbag market is not dead. According to Grand View Research, it was valued at $56.48 billion in 2024 and is projected to reach $81.79 billion by 2030, a compound annual growth rate of 6.5%.1 More than 60% of women aged 35 and older report always having a handbag with them for activities beyond work or school.¹ The market is growing. But how consumers are engaging with it has fundamentally shifted.
The luxury end of that market tells a more complicated story. Bain & Company’s 2024 luxury report, the most closely watched in the industry, identified the first contraction in personal luxury goods since the 2008 financial crisis, excluding the pandemic.2 The luxury consumer base shrank by 50 million people in just two years. And Bain’s own language is instructive: they noted consumers are rejecting luxury not for financial reasons but because the value-price relationship no longer feels honest.²
The cause is well-documented. Between 2019 and 2024, price hikes accounted for approximately 80% of luxury industry growth, according to McKinsey.3 Chanel’s Medium Classic Flap nearly doubled in price in five years, from $5,800 to $10,200.The Prada Galleria rose 85% over the same period. When unit growth stalled, price became the only lever brands could pull. The result was a value-price relationship that consumers, even wealthy ones, eventually refused.
The distinction between an investment and an investible proposition matters here. An investment is a financial instrument: you buy it, it appreciates, you sell it. The luxury industry spent years encouraging consumers to think of handbags this way, and the resale market briefly obliged. Chanel bags that once sold at or above retail on the secondary market now trade at 20 to 30% below it for many styles. The financial investment thesis has largely collapsed with the exception of Hermès quota bags and now Blazy’s Chanel both due to scarcity, demand and covetability.
An investible proposition is something different: an object that returns value not through resale but through use, through joy, through the daily compound interest of wearing something that is pragmatic and beautiful for your complex life. That is what the handbag has always been, at its best. It is what the discerning consumers are now demanding it be again.
The Old Value Proposition
For two decades, the luxury handbag operated on a simple logic. The right logo, the right price point, the right waiting list announced membership of a particular club. Value was external: conferred by the brand, confirmed by the price tag, communicated to others at a glance.
This was never really about the bag. It was about what the bag signalled about you, your success, your wealth, your proximity to luxury, your exclusivity. And for a long time that was enough.
But the model contained the seeds of its own collapse. When prices became untethered from any reasonable relationship to craft or material cost, consumers noticed. When the waiting list became theatre, consumers noticed. When the bag that cost £3,000 in 2019 cost £6,000 in 2024 with no meaningful improvement in what it offered, but actually counter to that failing quality craftsmanship and less materials used, consumers noticed and began asking what the luxury industry never had to answer before: what am I actually paying for?
The New Value Proposition
The answer for the modern consumer has three components:
The first is context. Does this bag work in my actual complex life? On my frame, with my wardrobe, for the things I carry on the days I live? This is not a lowering of standards, it’s raising your own standards as a stylish, intelligent consumer. It requires knowing yourself well enough to distinguish between the bag you covet (or think you covet) and the bag you need. Walking away from a beautiful small bag because the medium will serve me better twice as often is not being unromantic about fashion. I’m being precise about it, and my identity too.
The second is emotional resonance. The heritage of a house like Chanel, the feeling of wearing something genuinely considered, the joy of an object that has been made with extraordinary craft, these things matter, they hold value for you as the consumer. But they must be earned by the object, not borrowed from the price tag, the hype or the scarcity. Matthieu Blazy’s arrival at Chanel is instructive here. Chanel’s 2024 revenues declined 4.3%, a direct consequence of years of aggressive price increases that outpaced the emotional logic of the brand or the quality of the items.4 Blazy’s first collection restored design integrity and creative desire, and the market responded immediately: high single-digit growth returning in the second half of 2025. Demand now outstripping supply, a new generation of first-time Chanel customers are flooding into boutiques.
The third is value. Value is not the same as price. A £5,000 bag you carry every day because it is the right material in the right size for your actual context holds extraordinary value. A £5,000 bag that lives in its dustbag and is saved for best holds almost none. This is the cost-per-use equation that every considered consumer is now running, consciously or not.
And it is precisely this recalibration that explains two of the most significant shifts in the current market: the rise of the quality mid-tier bag and the rise of pre-loved shopping. If beauty, quality and cost are the current drivers in discerning consumer behaviours, and scarcity and accessibility are barriers to entry, both the mid-tier bag and pre-loved shopping can solve those immediately. A quality item, stylish, excellent price point, and in the interest of vintage, something unique to challenge the ubiquity while still orbiting in the heritage luxury brand’s world.
What the Luxury Handbag Signals Now
There is still a signal. The old signal was: I can afford this, I have access to this. It was addressed outward, to the room, to the observer.
The new signal however is addressed inward first. It says: I know my style, I understand my context. I choose accordingly. I wear this with intention. What it communicates to others is not cost or access but judgement: the quiet authority of someone who understands what she wants and why.
That is power. And that is taste and style. Not style as cosplay but style in context. The most enduring definition of it there is.
So no, handbags are not dead. But this idea that a bag’s value lives in its price tag or what it says about your proximity to luxury is certainly dying. That model broke under the weight of its own cynicism.
What has taken its place is something more demanding and more rewarding: their investible proposition. Through beauty, through craftsmanship, through use, through joy, through the particular intelligence of an object that was chosen because it was right. Not because it was available, not because it was coveted, not because it risks a global sell-out, not because you’re unsure if you even like it or if it’s just the hype.
The new handbag investible proposition: spend your money on the things you use every single day. Derive the value of joy, practical use, cost per wear. Be discerning. Say no.
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