Last loan guarantee? Hermès, Chanel, Gucci, Vuitton handbags
It’s well known in the fashion world – and particularly in the world of French luxury handbags – that many of the best-known design houses owe their current success to the Asian obsession with these accessories.
Asian shoppers queuing hopefully at Gucci and Louis Vuitton in Paris are legendary, as is the understanding that in cities like Hong Kong, a designer bag like these and Chanel or Dior is a sign of social success that can open many doors.
The latest bag-related trend, however, has nothing to do with fashion or the social access they represent. On the contrary, they have become a quick way to prepare money when their owners run out of dough to fill them.
Exclusive designer handbags have joined the list of goods that retain their value and can be used as collateral for loans for considerable sums. Given the state of the global economy, many observers predict a rapid spread of the new custom to the rest of the world.
“If you want to buy a designer handbag but are held back by pangs of guilt, just look at Hong Kong,” advises the UK’s Telegraph. For Le Figaro français, “Hong Kong fashionistas have found their pawnbroker” of luxury bags.
The trick is simple: cash-strapped women who own luxury bags – and sometimes men, who make up one in five customers – can get 80% of the item’s value back as a loan as long as the bag is a genuine Gucci, Chanel, Hermès, Prada or Louis Vuitton. Special editions and vintage classics offer even better loan leverage.
A Birkin bag, the Rolls Royce of its kind and one of Hermès’ most iconic handbags, recently snatched a $20,600 loan from a Hong Kong customer. Normally, a new Birkin costs around $6,300. But a limited edition or exotic model can reach $160,000. Like works of art, their value can increase with age.
Loans for less exclusive bags start at around $200. All are made for four months at 4% monthly interest. The Wall Street Journal reports that nearly all customers of Hong Kong’s leading lender, Lady Finance, are repaying the loans in full and getting their bags back. A group of experts on site verifies the authenticity of the bag and the presumably relieved customer walks out with the money within 30 minutes.
What happens if a loan is not repaid on time? The bag is immediately collected by a partner company specializing in the sale of second-hand luxury bags.
And the Birkin is heading to another fashion-savvy shopper.