May 30, 2014 6:22 pm

Designer fashion as investment purchases

Dior jacket©1stdibs.com

Dior jacket

The term “investment purchase” was a favourite of glossy magazines and luxury brands during the recent recession – and it still lingers on The proposition is tantalising: buy high-priced fashion pieces that are discreet and apparently timeless – a cashmere jumper or a sensible leather bag – and you’ll adore them and wear them ad infinitum.

In some instances, items not only retain their value but go on to yield hefty profits. At a time when luxury brand prices are outpacing inflation, investing in high-end fashion makes financial sense. Luxury goods rose four per cent annually between 2012 and 2014, and prices set by Richemont, Hermès and Louis Vuitton could rise six per cent this year, according to financial research group Sanford Bernstein.

Bigger returns are found at the upper end of the vintage fashion spectrum. William Banks-Blaney, founder of WilliamVintage, which specialises in high-end labels and mid-20th century haute couture, says business is booming. “I’d say the market is going up between 20 and 30 per cent a year in terms of value but some designers are way above that,” he says, noting that good-quality Courrèges has doubled in price during the past 18 months. “Unless it’s an early 20th-century museum-quality piece, there’s no reason you can’t buy something to wear, and then in a few years, sell it on and make money.”

Cathrin Petty, a managing director at JPMorgan, began collecting high-end and haute couture vintage two years ago and now has a wardrobe that is 85 per cent vintage, comprising everything from 1950s Hubert de Givenchy tailoring to a 1970s Yves Saint Laurent evening gown. “At first it was an affordable way to buy elegant haute couture-quality pieces for work,” she says. “But from an investment standpoint, I soon realised that these are pieces that don’t depreciate in time like contemporary stock.”

Petty’s most important investment (and one of the few pieces in her collection that she does not wear) is a 1924 hand-beaded ribbon dress labelled “Gabrielle Chanel” that she bought 18 months ago for £9,000. She says she has already turned down an offer from Chanel to buy the dress back for twice the price.

“Pieces need to be timeless, in the sense that they show the designer at his or her most brilliant,” says Kerry Taylor, who holds vintage couture sales at her auction house in south London. “They should also be in good condition, and unaltered.” Knowledge of their provenance is helpful too: “If it’s been worn by one of the great style icons like Audrey Hepburn or Wallis Simpson, you can usually add a zero to the price.”

Hermès bag©vestiairecollective.com

Hermès bag

Hermès handbags continue to be among fashion’s most sought-after, thanks to the company’s limited production runs and growing waiting lists for the items.

Carole Bettane, a Paris-based banker and co-founder of French cashmere brand Kujten, has bought two Hermès bags as financial assets. In 2010 she paid €5,200 for a new limited-edition Hermès Kelly black box, and the same bag was sold last year at a Monaco auction for close to €24,000. Her other Hermès bag is a hot pink ostrich skin Birkin, made famous by Victoria Beckham and bought on resale site, Vestiaire Collective, for €20,000 this year: “It was a bit expensive at the time but I’m pretty sure within two to five years it will make 20 per cent minimum.”

Another strategy is to invest in future classics. Rather than pursuing something that appears timeless, Banks-Blaney recommends distinctive statement piece from designers such as Mary Katrantzou, Roksanda Ilincic and Erdem. Averyl Oates, fashion director at Galeries Lafayette, agrees, pointing to the work of Simone Rocha and Christopher Kane.

As with contemporary fashion, Taylor says vintage is subject to cycles, and prices are sensitive to the current fashion exhibitions and what stars are wearing on the red carpet. At the recent Cannes Film Festival, we saw Eva Longoria in vintage Vionnet and Nicole Kidman sporting a 1955 diamond-pavéd Omega wristwatch. “Pucci is quite affordable, and there are great labels like Jean Muir and Janice Wainwright as well as fantastic pieces by Zandra Rhodes, which are underpriced currently,” she says.

For many, taking a cold financial view of fashion is not easy, and it is an emotional connection that often forces the hand. Oates believes this is where the fashion consumer parts ways with other types of investor: preserving for posterity matters more than financial gain. “What I think of as investment dressing is something that I want to hand down to my niece,” she says. “I don’t want to bury fashion in an archive, I want to immerse myself in it”.

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Stockists

vestiairecollective.com

1stdibs.com

kerrytaylorauctions.com

williamvintage.com

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