The world of fashion contains a surprising array of items that can be excellent long-term investments. Beyond just clothes and accessories to wear, certain rare and coveted fashion pieces can appreciate tremendously in value over time. Here we explore 5 of the best fashion investments with strong ROI potential.
High-End Luxury Watches
High-end luxury watches from the most prestigious and exclusive brands like Rolex, Patek Philippe, Audemars Piguet, Vacheron Constantin, and Cartier are among the top fashion investments with the potential for strong returns:
- Crafted from the finest materials such as solid gold, platinum, and silver and often adorned with diamonds, rubies, sapphires, and other precious gemstones, the most sought-after luxury watch models maintain excellent resale value and often gain value exponentially over time.
- Limited edition and one-of-a-kind watches released in low quantities can appreciate tremendously in value based on their rarity.
- Leading luxury watch brands have historied pedigrees spanning centuries and benefiting from constant technical innovations, making them a stable long-term store of value.
- Vintage and second-hand luxury watches from top brands that are in good restored condition also gain value over time as collectible artifacts.
Hermès Birkin Bags
The iconic and exclusive Birkin and Kelly handbags produced by the prestigious French luxury fashion house Hermès are among the most sound fashion investments:
- Made from the finest leathers and exotic materials like crocodile skin with personalized detailing like engraved hardware, each Birkin and Kelly bag takes expert Hermès artisans over 18-24 hours to meticulously craft by hand.
- Hermès intentionally limits the production of the bags to fewer than 200 units per model per year to preserve exclusivity and scarcity, with customer waitlists frequently extending up to 6 years to purchase one of these bags.
- Resale values for many pristine Birkin and Kelly bags are higher than original retail prices for new bags and continue climbing over time rather than depreciating. Rare and unique versions of Birkin bags can fetch hundreds of thousands of dollars at auction.
- Their neutral colors, classic and simple silhouettes, and unbranded styling allow Birkin and Kelly bags to maintain their coveted status and appeal over the long term instead of becoming outdated.
Statement Designer Jewelry
Sculptural, artistic, and innovative luxury jewelry pieces from renowned designers and jewelry maisons represent an opportunity to invest in precious wearable art that maintains intrinsic value:
- Rare and finely sourced gemstones, limited production runs, and exquisite craftsmanship make one-of-a-kind high jewelry creations by the likes of Joel Rosenthal, JAR, and Hemmerle highly coveted among collectors.
- Iconic high jewelry collections and designs preserve or increase in value over time and often develop cult-like followings amongst jewelry devotees that further drive aftermarket prices higher.
- Vintage and pre-owned statement jewelry pieces by luxury designers and maisons in excellent condition also appreciate in value as they become more scarce over time.
- Auction houses like Christie’s and Sotheby’s regularly set new world record prices at auction for exceptionally rare and valuable one-of-a-kind designer jewelry pieces that appreciate significantly above original retail values.
Foreign Direct Investments in Luxury Fashion Companies
Investing in established publicly-traded international luxury brands by purchasing stocks or ETFs represents an attractive avenue for accessing the lucrative luxury fashion market while also diversifying investment portfolios for the long run:
- Multi-billion dollar luxury conglomerates like LVMH, Kering, Richemont, Tapestry, Capri Holdings, and PVH own a diverse array of luxury fashion houses and have demonstrated steady growth trajectories benefitting from their substantial pricing power and loyal customer bases worldwide.
- The growing appetite and demand for luxury apparel, leather goods, jewelry, fragrances, and cosmetics among younger consumers and in emerging markets promises solid future growth potential.
- Trailblazing heritage luxury fashion houses like Louis Vuitton, Gucci, Cartier, and Balenciaga with decades or centuries of storied success have intrinsic and enduring brand value.
- As demonstrated historically, luxury company stocks can hedge against inflationary cycles and broader volatility in consumer markets and economic conditions compared to non-luxury fashion stocks.
Vintage and Rare Contemporary Fashion
Vintage High Fashion From Earlier Eras Maintains Value:
- Iconic silhouettes and fabrics keep vintage Chanel, Dior, Balenciaga, Halston, Yves Saint Laurent, and other major labels in demand.
- Rare contemporary pieces by today’s avant-garde designers become more precious over time.
- Archival and limited edition relaunches of vintage designs by fashion houses create Built-in scarcity.
- Vintage fashion appeals to younger generations and resonates across changing style eras.
Investing In Fashion With An ESG Lens
Socially conscious investors should seek:
- Sustainable materials and supply chains
- Ethical labor practices
- Inclusive hiring and leadership
- Reduced environmental impact
The fashion world is evolving, and brands embracing ESG metrics can attract values-driven investments.
Diversify Your Fashion Investment Portfolio
When assembling a diversified fashion investment portfolio, experts recommend balancing emerging designers with established luxury brands. Up-and-coming designers like Chaps and Co represent opportunities to invest early in the next generation of potential luxury powerhouses. Combining rising stars with iconic veteran fashion houses creates a robust collection suited for the test of time.
Follow core investing principles like diversification:
- Balance various fashion categories like jewelry, bags, watches, and stocks.
- Mix emerging designers with established luxury brands.
- Combine vintage and contemporary pieces.
A diversified fashion portfolio stands the test of shifting consumer tastes and market fluctuations. Work with fashion investment consultants to build a robust collection spanning fashion eras, origins, and categories worthy of both investment and heirloom status. Let your passion also guide you to pieces that resonate.
Frequently Asked Questions
How long should you hold fashion investments?
Aim to hold luxury fashion investments long-term, ideally 10+ years. As with stocks, short-term volatility is normal but values appreciate over decades.
What percentage of investment portfolio in fashion is recommended?
Limit higher-risk fashion investments to 5-10% of the portfolio. Complement with stocks, real estate, etc.
Is fashion investing only for the ultra-wealthy?
Not necessarily. Some vintage and emerging designer pieces can be acquired without breaking the bank. Focus on quality over quantity in curating wardrobe investments.
With knowledge and expert guidance, fashion investments offer enduring value along with the ability to make a personal statement and bring joy to your life. The rare opportunity to physically hold, use, and admire precious assets makes fashion a unique long-term investment category.
The Closing
The world of high fashion contains some surprising yet satisfying opportunities for long-term investments. While clothes and accessories are often thought of as depreciating assets, certain coveted luxury pieces actually appreciate substantially over decades – especially rare handbags, watches, jewelry, and heritage fashion house stocks.
By investing wisely in scarce, meticulously crafted fashion items with timeless appeal and cultural significance, it is possible to grow your net worth while also owning objects of beauty, rarity, and lasting value.
Work with knowledgeable fashion investment consultants to identify special pieces that speak to you while diversifying your fashion portfolio across categories, new and vintage items, and buying horizons.
While fashion investments come with risks like other specialty alternatives, the rewards can be considerable for those with true passion, patience, and discernment.
Let your unique inspirations guide you, but adhere to sound diversification and due diligence principles to construct a fashion investment portfolio as enduring as the items within it.
