Most of us fashionista's use the term 'investment' to justify certain purchases we don't necessarily need. However, there is one item, that is definitely worthy of the name investment: the Chanel 2.55, also known as the Chanel Classic Flap bag. The value of this sought after bag has increased with a staggering 70% over the last 6 years! We explain precisely why it's is a financially sound idea to invest your funds on a Chanel bag, instead of stuffing it in your savings account.
Chanel presented her 2.55 flap bag in February 1955 and it is the oldest and most wanted bag from the Chanel collection. The most popular design of Chanel at the moment is the Classic Flap, which is a reinterpretation of the orginal 2.55 by Karl Lagerfeld. In 1955 the bag retailed for a prize of €199, quite an expensive bag for that period of time. However, in 1990, the price of a classic Chanel bag had gone up to €1030. It might be hard to believe, but this is the slowest growth in value that the Classic Flap bag has ever experienced. From this period onwards, Chanel started to use different pricing strategies and the price tags started to skyrocket. The worth of the bag was €1470 by 2005, €2550 by 2010, €3940 by 2012 and eventually €4260 by 2016. This means that the value of the bag has increased with 71,92% over 6 years. Anyone else feel slightly flabbergasted?
Prices shown in dollars.
What's the explanation for this huge increase?
So it's very clear that the price of a medium flap bag has only increased over the years, but this rise is definitely not only due to inflation, rise of the material costs and rising labour costs. When we look at the average inflation between 1955 and 2016, we see a percentage of 3,7 per year. If we apply this to the 2.55 bag from 1955, today's price would be €1760. That is €2500 less than we pay right now. So what has lead to this major increase? Firstly, as any other brand, Chanel seeks to increase it profit and secondly the fashion house tries to maintain a sense of exclusiveness. Remarkably the price increases have little effect on our shopping behaviour, as even during financial depression Chanel continued to thrive with their Classic Flaps.
Don't save, spend!
To prove that a Chanel bag is a solid investment, we have compared the stock market and the interest on your savings-account, with the profit you could make on your Chanel purchase. When you bring your money to a savings-account, the maximum interest you will receive will be 2%. A very low number, with the consequence that you will have to store your money for a certain period, to actually receive the interest. No need to buy stocks or shares either, since selling doesn't give you any profit. When you are willing to buy a Chanel bag, you can easily sell it for more than you actually paid for, even though you have to wait a few years before getting some serious gains.