This Bag's Value Is Rising Faster Than Inflation

Its price has increased 52% in 3 years.

ICYMI, U.S. inflation is up 8.3% — over four times above the typical rate — and the stock market is down 17.02%. But all is not lost, because we still have Chanel. Or, more specifically, we still have the Chanel classic flap handbag, an alternative asset whose value has risen faster than inflation not just in 2022, but consistently since 2019.

What Happened, Exactly

The price of this popular handbag has increased 52% in three years for an average annual increase of 17.33%. That's more than double the current inflation rate. In 2019, a Chanel medium classic flap would set you back $5,800. This rose to $6,500 in 2020; $6,800 in January 2021; $7,800 in July 2021; and $8,800 in November 2021. Yes, Chanel instituted three price hikes in one calendar year alone.

Chanel’s classic flap price hikes coincided with another major change for this specific handbag style: the institution of annual quotas to limit the number any single consumer can buy. Beginning June 7, 2021 — about a month before the second price hike of the year — Chanel enacted an annual limit of two classic flaps per customer. The prevailing industry assumption is that Chanel has dovetailed price hikes with supply restraints to make a run at reaching Hermès status — i.e. reaching a point at which the bags cost well into the five figures… for the consumers lucky enough to have the opportunity to buy them.

What It Means, Generally

I don’t have a crystal ball, but basic economics point to the value of Chanel classic flap handbags continuing to increase, both via additional price hikes (like the most recent increase across the U.K. and Europe in August 2022) and via the newly limited supply. Further, historical data shows that when Chanel classic flap prices rise at primary retailers, Chanel classic flaps prices at secondary retailers rise as well.

At present, Chanel medium classic flaps in “good” condition (i.e. they show some wear) are listing between 87%-105% of their current retail prices on The RealReal, meaning a bag made in 2019 (probably bought for $5,800) is listing for $7,600+ today. Bags in “excellent” or “pristine” condition are going for even more than that.

In Conclusion

The harder it becomes for consumers to strut into a Chanel boutique and purchase a classic flap off the shelf, the more demand will rise on the secondary market. More demand likely means some combination of higher prices for classic flaps and shorter time to sell them. In other words, Chanel classic flaps are — and will continue to be — sound investments for both your wardrobe and your financial portfolio.