We all know that splashing out on Although bags made by other luxury Handbags are increasingly “Other brands

Although bags made by other luxury Handbags are increasingly “Other brands have come and gone, but
designer fashion labels can be expensive. brands like Chanel and Louis Vuitton are in the century since these first handbags
Christie's Rachel Koffsky examines an auction lot

being seen as an investment

Nonetheless, the idea of paying six figures also highly collectable, it is those made by were introduced, the materials and tech-
for a used handbag may sound somewhat Hermès that attract the highest prices and class in their own right, as niques used by Hermès have remained ex-
extreme. Increasingly, though, serious are considered the most desirable. well as highly desirable tremely consistent – which is why so many
collectors are spending this kind of money “The history of Hermès and the crafts- have survived. The Birkin, for example,
fashion accessories
at auction for the ultimate handbag manship of the maison are intrinsic to the is made by hand in an atelier and can
“must have” – the exotic Himalaya Birkin, pieces, which greatly affects demand for, take up to 40 hours using a double-needle
produced by Hermès. and therefore the value of, its handbags,” saddle stitch that cannot be replicated by
In 2017, Christie’s set the world auction explains Rachel Koffsky, Head of Sales for a machine. It is the pinnacle of what a
record for the most expensive handbag Christie’s Handbag department in London. handbag can be.
when it sold a Himalaya Birkin with white “Hermès was established in 1837 as a har- steadfast. The first handbags created for “With other contemporary brands, while
gold and diamond hardware. Under the ness workshop. At the turn of the century ladies were designed in response to the bags may still be of high quality, some-
hammer in Hong Kong, it achieved the new products were introduced as the invention of the automobile, and were times fashion is the primary function.

equivalent of US$386,000. Since then, the maison diversified in order to meet the crafted in the workshop using some of the Hermès bags are made to last. That’s not to
secondary market for handbags has con- demands of a changing world, but the techniques utilised in the creation of the say we don’t sell beautiful bags from other
tinued to grow, with pieces fetching dizzy- commitment to craftsmanship remained famous saddles. makers – but there are far fewer of them.”
ing sums on a regular basis. Indeed, such is
the demand that Christie’s now host seven
live and online auctions each year, in Asia,
the US and the UK.
Aficionados can visit entire museums I N V E S T O R O F PA S S I O N
devoted to them – one in South Korea is
T H E W E A LT H R E P O R T TA L K S T O PA R I S - B A S E D H A N D B A G
even bag shaped – and in April, the V&A in C O L L E C T O R J U L I A K O VA L J O VA
London launches a dedicated exhibition,
Bags: Inside Out. Passionate collectors such
as Singapore socialite and entrepreneur
Jamie Chua and Paris-based Julia Kovaljova
(see interview opposite) have thousands of as What inspired you to start collecting handbags?
social media followers. jk I was always interested in fashion, and I believe that shoes
As with other investments of passion and accessories are the key to any look. There is no more
like rare whisky (see The Wealth Report important accessory than a handbag – not only is it your
2019) whose value has risen sharply in major styling element, it’s also a daily necessity.
recent years, handbags are increasing-
ly being seen as an investment class in as Do you have a favourite brand?
their own right, as well as highly desirable jk Hermès, of course! Its styles transcend fashion. Occasionally
fashion accessories. I will also buy a rare Chanel limited edition bag or clutch.

It’s in
To that end, Art Market Research (AMR),
P
which supplies much of the data for the as Do you remember your first Hermès bag?
A Knight Frank Luxury Investment Index jk Yes, it was a 32cm Kelly bag in orange, the brand's signature

Julia Kovaljova models one of her favourite Kelly handbags

(KFLII), has launched the first indices track- colour. I thought it would be appropriate to start with an
S

the Bag
ing the price performance of handbags. For iconic colour and style, named after HRH Princess Grace
S KFLII, we focus specifically on bags made of Monaco. Even now, this style remains my favourite.
by Hermès. Over the past ten years, this
I
index has more than doubled in value, as Do you have vintage bags in your collection as well as
O rising by 13% in 2019 alone (see page 90). new editions? Which do you prefer, and why?
“All of our indices on antiques and jk As an experienced collector, I am no longer interested in
N
WORDS — ANDREW SHIRLEY collectables use a basket of goods method- regular Kelly, Birkin and Constance handbags. But every
S ology in the same way as the consumer year Hermès reissues and updates these styles, with a new
price index,” says AMR’s Sebastian Duthy. leather, a new combination of materials, an interesting col-
The Wealth Report exclusively reveals the results of “However, it’s only been possible to create our or pattern, skin inserts, appliqué or a theme. These are
the first index dedicated to tracking the burgeoning an index on handbags now because of the the bags I try to get for my collection. Vintage, though, is my
market for collectable handbags and delves into the frequency with which many iconic pieces special love because I enjoy the whole process of searching
world of this emerging asset class are coming to auction today.” for them. They were issued a long time ago, in limited quan-

T H E W E A LT H R E P O R T – 2 0 2 0 94 95 K N I G H T F R A N K .C O M / W E A LT H R E P O R T

tities, and will never be produced again, which makes them
very valuable. To find such a bag in good condition and for a
good price is the biggest joy for a true collector. I have some
vintage bags that I only bought just a few years ago, but
which have already doubled in value.
as
jk
How many bags do you have in your collection now?
If we are talking about classic styles such as the Kelly,
Birkin and Constance, then around 100 pieces.
as Which is the rarest or most valuable? And which is
your favourite?
jk The rarest are probably the Kelly Picnic and Kelly Teddy,
the most valuable right now is a Birkin Himalaya (see page
93), and my favourite is a vintage Kelly from 1992 in simple
black box leather. It was customised to my design by the
artisan who used to manufacture these bags for Hermès.
Don’t know your Constance from your Kelly? Never
my experience and connections, I could have secured
these bags on the secondary market by paying a high
T H E E S S E N T I A L
fear, this guide to the three most collected Hermès
price, but as a true collector, I would always prefer to make
a good deal!
G U I D E T O bags from Christie’s Rachel Koffsky will turn you
as Do you view your collection as an investment or as
H E R M È S into an expert
jk
something to enjoy and treasure?
When I started buying Hermès handbags, it was purely
H A N D B A G S
for the joy of owning them. Over time, however, I began to
realise that they were also an investment. Of course, just as
in the art world, not every piece will become more valuable
and as a collector it’s important to understand how to create
a collection that will become more valuable over time.
as You are active on social media. Is that an important
aspect of your collecting? Originally known as the Sac à Born on an international flight
jk Absolutely. I have around 40,000 followers on Instagram dépêches, the style was created in in 1983 when actress Jane Birkin

The Kelly

The Birkin
This bag is the only one in the whole world – a collector from (@julia_kovaljova), many of them interested in or connect- 1935 by Émile-Maurice Hermès so told her neighbouring passenger –
Asia spent a long time trying to persuade me to sell it, but ed with the Hermès brand, and many collectors worldwide. his wife could have a bag that was Hermès creative director Jean-Louis
I could not do it. I get a lot of requests for help and advice, including on how more convenient to carry. In 1956, Dumas – that most leather bags were
to identify a fake – sadly there are a lot of counterfeits on the Princess Grace of Monaco, the too structured for her. He designed
as Is there a bag you don’t have that you really want? secondary market – as well as offers of rare bags. former actress Grace Kelly, used something more “boho” on the back
jk There are lots! Mainly bags from limited editions or vin- her Hermès Sac to shield her preg- of an airsickness bag. The Birkin is
tage pieces such as the Kelly So Black created by Jean G O O N L I N E T O R E A D T H E F U L L I N T E R V I E W A N D G E T J U L I A’ S T O P nancy from the paparazzi, gaining modelled after Hermès’ iconic
Paul Gaultier or the Kelly Dalmatian. To be honest, with TIPS ON HANDBAG C OLLECTING the bag worldwide attention – and Haut à Courroies bag.
a new name.
IN THE KNOW

IN THE KNOW The must-have Birkin is currently

Although produced in many colours
and materials, the Osier Kelly
or “Picnic” made of wicker and
first produced in 2011 is one
of the most unusual.
Named after the fifth child of Hermès
designer Catherine Chaillet – the
the “So Black” (pictured below),
featuring delicate black PVD-coated
hardware. Designed by Jean Paul
Gaultier in 2010, examples are rare
and highly sought after.

The Constance
HIGHEST PRICE first bag is said to have left the HIGHEST PRICE

AT AUCTION factory on the day she was born AT AUCTION

US$241,000 for a Himalaya Niloticus – the Constance, which first entered US$386,000 for a Himalaya Nilot-
Retourne 25 with palladium hard- the market in 1959, is perhaps the icus Crocodile 30 with gold and
P
ware (Christie’s 2019). least well known of our trio. However, diamond hardware (Christie’s 2017).
A collectors admire its elegant shape

Julia Kovaljova with part of her Hermès handbag collection

and functional design.
S

S IN THE KNOW

The Constance is designed as a

I
shoulder bag and was a favourite of
O Jackie Onassis. The Elan, a slightly
longer and narrower style, was
N
introduced in 2010.
S

HIGHEST PRICE

AT AUCTION

US$89,000 for a Niloticus Croco-

dile 24 with palladium hardware

(Christie’s 2016).

T H E W E A LT H R E P O R T – 2 0 2 0 96 97 K N I G H T F R A N K .C O M / W E A LT H R E P O R T
As luxury Authenticity matters Follow the money

D A T A B A N K
collectables Whether you prefer your Banksy on “Art speculation” has matured into “art
continue their rise smooth wove paper or simply shredded, investment” as collectors and family of-
up the investment
agenda, a growing
number of fledgling
the business of ensuring authenticity can be
perplexing. Contemporary works offer the most
transparent provenance chain, with recent
fices increasingly see art as a working part of
their wealth portfolio. The monetisation of art
is big business: banks offer specialist loans
D A T A B A N KThe numbers behind The Wealth Report
UHNWI collectors original bills of sale and blockchain technology against art; hedge funds and dealers place
are making their providing certification from the artist. With irrevocable bids at auction from clients specu- The numbers behind The Wealth Report
first forays into older works, more time-consuming – and some- lating on lots outperforming their estimates;
the world of times expensive – “homework” may be needed. and brokers advise their clients on buying art for
auction sales. If the work is absent from the artist’s catalogue investment. Money flows fastest in those areas
Leading auction raisonné, then only accreditation by the rele- with the highest “supply” and turnover: con-
The Attitudes Survey 2020. Based on responses from 620 private bankers and wealth advisors managing more
house Bonhams vant institute will suffice. When it comes to the temporary art, jewellery, cars, wine, whisky and
than US$3.3 trillion of wealth for UHNWI clients. The survey ran during October and November 2019
offers five tips world of fine art and antiques, and especially watches. These specialist auction markets are
for prospective with older objects where documentation may concentrated in London, New York and Hong Philanthropy and environmental concerns
bidders and sellers well have been mislaid along the way, the more Kong, creating a dynamic market with associat- Are your clients becoming more worried Are your clients' philanthropic
Philanthropy and environmental concerns
information you can amass the better, including ed price fluctuations that percolate at different about the impact of climate change? activities increasing?
relating to previous appearances at auction, and levels depending on where they are offered. Are your clients
Respondents becoming
who said yes more worried Are your clients'
Respondents philanthropic
who said yes
about the impact of climate change? activities increasing?
in galleries and exhibitions. Such collections should be valued regularly for Africa 78% 60%
Asia (excl Indian subcontinent) Respondents who said yes
74% Respondents who said yes
63%
insurance and tax planning purposes.
Australasia 74% 69%
Read the small print Africa 78% 60%
Europe (excl UK) 84% 76%
Asia (excl Indian subcontinent) 74% 63%
The art world is becoming an increas- Timing is everything Latin America
Australasia
62%
74%
69%
69%
Indian subcontinent 82% 67%
ingly regulated place, with different Auctioneers try as far as possible to Europe (excl UK) 84% 76%
Middle East 73% 69%
Latin America 62% 69%
rules and rates relating to the sale of fine art. curate their sales to avoid too many sim- North America 71% 76%
Indian subcontinent 82% 67%
Globally, buyers and sellers should make sure ilar items overwhelming demand on the day. Russia & CIS 57% 64%
Middle East 73% 69%
UK 77% 64%
they are aware of current CITES regulations If you are selling, it’s worth discussing with North America
Regional average
71%
73%
76%
68%
Russia & CIS 57% 64%
covering everything from the sale and move- the auctioneer the timing of the sale and what
UK Specifically,
77% are they becoming more interested in the following
64% causes?
ment of a rhinoceros horn libation cup to the other lots are included, and confirming the Regional average 73% 68%
Respondents who chose each option
date of the rosewood used on one of Eric Clap- marketing plan devised to sell your item. Specifically, are they becoming more interested in the following causes?Healthcare/ Diversity
Climate Conservation/ disease and social
ton’s guitars. The impending EU Export Direc- Specific sale categories, whether that be Asian Respondents who
Employment chose each option
change The arts Education environment prevention inclusion
tive threatens to impose tough sanctions on the art, Contemporary or Impressionists tend to Healthcare/ Diversity
Africa 70% 77%
Climate 58% 89% 85%
Conservation/ 76%
disease 76%social
and
import back into Europe of works of art that are be held during certain weeks of the year when Asia (excl Indian subcontinent) Employment
48% change
61% The
65%arts Education
77% environment
71% prevention
82% inclusion
57%

more than 200 years old, while the US sanctions the market converges in one of the big centres Australasia 25% 73% 74% 76% 78% 83% 69%
Africa 70% 77% 58% 89% 85% 76% 76%
Europe (excl UK) 39% 90% 73% 90% 83% 73% 59%
on Iran restrict the import of contemporary (London, New York or Hong Kong). For sellers Asia (excl Indian subcontinent) 48% 61% 65% 77% 71% 82% 57%
Latin America 75% 63% 90% 89% 63% 86% 100%
Australasia 25% 73% 74% 76% 78% 83% 69%
art, Persian rugs and Islamic art. Many UK art that means ensuring the auction house is do- Indian subcontinent
Europe (excl UK)
81%
39%
69%
90%
44%
73%
95%
90%
82%
83%
89%
73%
70%
59%
Middle East 60% 90% 67% 95% 89% 89% 60%
collections will find themselves caught by the ing its utmost to make your property stand out, Latin America 75% 63% 90% 89% 63% 86% 100%
North America 46% 69% 79% 89% 74% 82% 64%
Indian subcontinent 81% 69% 44% 95% 82% 89% 70%
forthcoming UK Ivory Act, which effectively while for buyers it's an opportunity to compare Russia & CIS 0% 75% 90% 70% 73% 89% 75%
Middle East 60% 90% 67% 95% 89% 89% 60%
bans the sale or export of the majority of items the offerings on the market at that point in time. UK 20% 78% 63% 69% 80% 75% 63%
North America 46% 69% 79% 89% 74% 82% 64%
P Regional average 46% 74% 70% 84% 78% 82% 69%
made from or containing more than 10% ivory. Russia & CIS 0% 75% 90% 70% 73% 89% 75%
UK Please
20% choose 78%
which of the following
63% environmental
69% statements
80% apply to your
75% clients 63%
A Provenance is golden
Regional average 46% 74% 70% 84% 78% 82% 69%
Respondents who chose each option
The gold standard for any serious
S Please choose which of the following
In general, my clients
environmental statements
My clients who own
apply to your clients
My clients are more From a PR perspective my
collector. If you can join all the dots
are looking to reduce
Respondents private jets are using
who chose each option likely to consider clients feel it is important
from creation to current ownership, you have

Auction
S their personal them less to help reduce buying an to be seen to be taking
In general,
carbon my clients
footprint My clients
their carbonwho own
footprint My clients are more
electric/hybrid car From aon
action PRclimate
perspective my
change
the art market equivalent of a gilt asset. are looking to reduce private jets are using likely to consider clients feel it is important
I
Furthermore, one only has to look at a “big Africa their personal
55% them
3% less to help reduce buying
30% an to be seen to be taking
50%
Asia (excl Indian subcontinent) carbon footprint
36% their
3% carbon footprint electric/hybrid
38% car action
47% on climate change
O name” auction, from aristocrats to rock stars, to Australasia 62% 3% 65% 38%

Top Tips
Africa 55% 3% 30% 50%
see that the intangible lustre associated with Europe (excl UK) 53% 11% 64% 49%
N Asia (excl Indian subcontinent) 36% 3% 38% 47%
Latin America 75% 25% 50% 13%
provenance provides a very tangible financial Australasia 62% 3% 65% 38%
Indian subcontinent 40% 4% 53% 51%
S boost to the hammer price. It’s as true today as Europe (excl UK) 53% 11% 64% 49%
Middle East 53% 6% 35% 59%
Latin America 75% 25% 50% 13%
it was when our business was first established North America
Indian subcontinent
55%
40%
7%
4%
67%
53%
38%
51%
Russia & CIS 29% 14% 29% 43%
in the 18th century that large, dedicated Middle East 53% 6% 35% 59%
UK 60% 2% 72% 57%
North America 55% 7% 67% 38%
single-owner sales from historic properties Regional average 52% 8% 50% 44%
Russia & CIS 29% 14% 29% 43%
WORDS — HARVEY CAMMELL
still draw the biggest crowds and, invariably, UK 60% 2% 72% 57%
G L O B A L D I R E C T O R O F VA L U AT I O N S , T R U S T S & E S TAT E S , B O N H A M S the most expansive bidding. Regional average 52% 8% 50% 44%

T H E W E A LT H R E P O R T – 2 0 2 0 98 99 K N I G H T F R A N K .C O M / W E A LT H R E P O R T
 Property investments Residential property

In terms of your clients’ property investment decisions and the concept In terms of your clients' total wealth, what proportion What proportion of your clients are planning
of wellness, which of the following statements applies? is accounted for by the principal and second homes to buy a new home in 2020?
Respondents who chose each option where they and their families spend time?

Increasingly My clients are increasingly My clients are increasingly Africa 39% 23%
interested in real concerned about the concerned about the Asia (excl Indian subcontinent) 40% 21%
estate sectors that impact of the buildings they impact of the buildings Australasia 36% 15%
could profit from the invest in on the wellness of they invest in on the Europe (excl UK) 26% 22%
wellness trend their occupants wider environment Latin America 21% 21%
Indian subcontinent 34% 24%
Africa 40% 28% 51%
Middle East 20% 26%
Asia (excl Indian subcontinent) 65% 19% 31%
North America 25% 19%
Australasia 41% 28% 61%
Russia & CIS 39% 18%
Europe (excl UK) 50% 25% 52%
UK 32% 20%
Latin America 67% 50% 42%
Regional average 31% 21%
Indian subcontinent 52% 30% 37%
Middle East 58% 16% 47% Rank their main reasons for purchase (1=most popular)
North America 53% 24% 53%
Upgrading Moving
Russia & CIS 69% 0% 31%
the family's permanently to Business or A new A new
UK 45% 29% 49% main a new country Tax employment holiday Children's Downsizing
holiday
Regional average 54% 25% 45% residence or territory reasons reasons home (sun) home (ski) education or retirement

What % of your clients are planning to invest in commercial property Africa 2 1 7 6 5 8 3 4

Asia (excl Indian subcontinent) 1 5 4 3 7 8 2 6
(not first or second homes) inside or outside their country of residence in 2020?
Australasia 1 5 7 4 3 8 6 2
Inside their country of residence Outside their country of residence Europe (excl UK) 1 2 5 3 6 8 7 4
Latin America 1 3 1 5 4 n/a n/a 5
Africa 23% 14%
Indian subcontinent 1 3 4 5 7 8 2 6
Asia (excl Indian subcontinent) 24% 17%
Middle East 1 3 4 7 1 4 6 8
Australasia 21% 8%
North America 2 7 1 5 3 6 8 4
Europe (excl UK) 28% 21%
Russia & CIS 1 3 8 5 4 6 2 6
Latin America 29% 24%
UK 1 2 5 4 3 8 7 6
Indian subcontinent 26% 15%
Regional average 1 2 6 5 4 8 3 7
Middle East 20% 32%
North America 24% 13% Where are they planning to purchase?
Russia & CIS 20% 11% Top five countries chosen
UK 24% 10%
1st 2nd 3rd 4th 5th
Regional average 24% 17%

Are the following sectors becoming of more interest to your clients?

Africa
Asia (excl Indian subcontinent)
UK
US
US
UK
Portugal
Singapore
Australia
Australia
South Africa
Canada UK
Australasia US UK New Zealand Australia France The most popular
country of choice

d
Europe (excl UK) UK US Spain Portugal France

an
ng
e
ur

tl
for residential
d
si
re

bt
D r n te

en
is

ou
tu

Latin America
l

US Spain Italy Indonesia UK

de
ct e r l
t

ra
re

se at tia
le

en
n

purchases
m
uc

o e
th
l
s

tu
ca
ria

io

ty
&

op
iv n
ic

em
tr
es

en

ul
at

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er
lth

Indian subcontinent
s

UK India US Australia Singapore

st
st
l

as

el
el

ic
ai

uc
ic

ir

op
ud
du
gi

ea

ev
es
ot

gr
et

fr

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ff

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Lo

St

Pr
In

In
O

A
R

Middle East UK US Switzerland France Portugal

Africa 58% 64% 64% 44% 46% 56% 48% 80% 79% 66% 41% 73% 61% 22% North America US UK Bahamas France Canada
Asia (excl Indian subcontinent) 72% 62% 50% 50% 37% 50% 65% 40% 75% 73% 27% 52% 59% 27% Russia & CIS Spain US Italy UK Russia
Australasia 83% 40% 33% 60% 80% 86% 33% 38% 68% 80% 50% 52% 69% 72% UK UK France Spain US Switzerland
Europe (excl UK) 71% 77% 43% 56% 35% 54% 60% 80% 47% 66% 31% 66% 61% 42%
Latin America 90% 71% 50% 83% 60% 50% 57% 67% 50% 67% 50% 67% 67% 50% When choosing a new home, which attributes are becoming
Indian subcontinent 81% 65% 74% 57% 56% 60% 76% 62% 67% 79% 46% 63% 53% 40% increasingly important to your clients?
Middle East 78% 84% 38% 63% 50% 73% 80% 75% 69% 68% 33% 53% 74% 31%
Respondents who chose each option
North America 75% 43% 45% 68% 64% 67% 27% 49% 66% 78% 19% 64% 59% 31%
Russia & CIS 62% 33% 42% 45% 55% 55% 42% 27% 36% 36% 42% 55% 42% 50% How property
design Availability Access to
UK 80% 69% 24% 76% 46% 41% 32% 72% 47% 49% 35% 58% 66% 39%
contributes Wellness Quality and quality nearby green Energy efficiency
Regional average 75% 61% 46% 60% 53% 59% 52% 59% 60% 66% 38% 60% 61% 40%
to physical amenities of nearby of local Air quality spaces for and environmental
and mental offered by a medical wellness around the recreation friendliness
Overall, in which countries are they most likely to invest?
wellbeing development facilities facilities* property and leisure of the building
Top five countries chosen
Africa 51% 51% 51% 57% 29% 47% 57%
1st 2nd 3rd 4th 5th Asia (excl Indian subcontinent) 59% 40% 49% 43% 45% 38% 22%
Australasia 54% 24% 36% 48% 26% 44% 40%

54%
Africa UK US S. Africa Kenya Australia
Europe (excl UK) 51% 34% 40% 53% 38% 57% 45%
Asia (excl Indian subcontinent) US UK Singapore Australia Japan
Latin America 14% 43% 7% 43% 36% 50% 36%
Australasia US Australia UK NZ UAE
Indian subcontinent 55% 55% 36% 64% 60% 60% 24%
Europe (excl UK) UK US Germany Spain Portugal
of clients are increasingly Middle East 42% 35% 31% 31% 15% 38% 27%
Latin America US Spain Australia UK Brazil interested in real estate
North America 56% 32% 44% 54% 35% 49% 32%
Indian subcontinent India UK US UAE Singapore sectors that could
profit from the Russia & CIS 50% 21% 29% 57% 71% 57% 29%
Middle East UK US Germany France UAE
wellness UK 48% 23% 45% 40% 45% 60% 47%
North America US UK Canada Singapore India
trend Regional average 48% 36% 37% 49% 40% 50% 36%
Russia & CIS UK Italy Israel Spain US

UK UK US France Italy Germany

*Gyms; sports clubs; spas; healthy eating options

T H E W E A LT H R E P O R T – 2 0 2 0 100 101 K N I G H T F R A N K .C O M / W E A LT H R E P O R T