The global collectibles market was valued at around $372 billion in 2020, and it’s expected to keep growing steadily at a rate of 7 percent from 2021 to 2028.As a subcategory of collectible items, luxury collectibles are setting record-breaking prices, and are leading to an overall increase in value for the entire collectibles market. Indeed, high-profile sales and auctions of luxury items attract media attention and investor interest and prove that the collectibles market is thriving. From Van Cleef watches to Louis Vuitton handbags, we’ll cover the most popular luxury collectible items and how collectibles insurance safeguards the total value of these alternative investments.
The Popularity of Luxury Watches
The avid collector sees luxury watches as more than just timekeeping devices; they also view them as symbols of exquisite craftsmanship, engineering masterpieces, and, in some cases, as heirlooms to be passed down. Luxury watches are not typically mass-produced, which adds to their intrinsic rarity.
Usually, there are designated watchmakers — renowned for their artistry — who sketch out the drawings of the watch before they assemble them by hand. Because of the combination of rare materials and one-of-a-kind craftsmanship, luxury watches often fetch millions of dollars at auction — a Patek Philippe Grandmaster Chime Ref. 6300A-010 watch, in particular, sold for an estimated $31 million in a Christie’s Auction in 2019. Here are the most popular luxury watch brands that have sold for millions at auction:
- Patek Philippe: The Patek Philippe brand was started in 1839, and over the next 80 years, the Stern family has taken over to continue the craftsmanship’s legacy. Patek Philippe watches are famous for their precision in watchmaking elements. For Patek Philippe watches, record-breaking prices are not one-time events; they repeatedly set new benchmarks for auction sales.
- Rolex: Despite their luxury price, Rolexes have become somewhat of a household name because celebrities are known for wearing them during famous events. For example, actor Paul Newman wore a Rolex watch during his racing career. The celebrity spotlight, rare materials, and beautiful designs made Rolex watches a standard for luxury collectibles. A Rolex watch previously owned by Paul Newman sold for around $17 million in 2017.
Luxury Handbags as an Investment
Luxury handbags have long held a special place in fashion and style, and designers such as Louis Vuitton, Hermes, and Chanel play pivotal roles in transforming handbags into symbols of luxury and status. Fashion magazines such as Vogue often feature celebrities wearing luxury handbags, increasing attention.
Luxury handbags are accompanied by brand reputation, limited editions, and iconic designs, and are typically made of expensive materials such as fine Italian leather. Over the years, luxury handbags have become much sought-after collectible items and are now a form of alternative investment. The most popular luxury handbags are:
- Hermes Birkin: Hermes Birkin is known for being the most coveted luxury handbag worldwide and comes with a high price point. The most affordable Hermes Birkin bag sells at $10 thousand. Hermes Birkin designs have featured a creative hybrid of expensive materials such as crocodile skin and encrusted diamonds, and this exact handbag sold for $450,000.
- Louis Vuitton: Louis Vuitton is a staple amongst celebrities. Collectors can identify a Louis Vuitton bag by its signature logos, which have remained consistent over the years. The most expensive Louis Vuitton sells for $150 thousand, and because of its limited availability and exclusivity, this value is likely to accrue over the years.
The Trend in Luxury Sneakers
Sneaker culture has transformed the collectibles market; these casual streetwear items are now sold for thousands of dollars. From unique collaborations between brands and celebrities, limited editions, and seasonal releases, luxury sneakers are adding momentum to the collectibles market. The most popular luxury sneaker brands are:
- Nike: Nike has become a household name known for its affordability and iconic image. However, occasionally, Nike releases rare editions, which are the designs that collectors covet and seek. A Nike SB Dunk Low Paris Benard Buffet edition sells for $90 thousand.
- Air Jordans: Synonymous with basketball shoes, Air Jordans has come a long way since its initial brand inception. Michael Jordan has inspired this iconic line and has worn the Air Jordans himself during several basketball games. Because of the celebrity association, Air Jordans worn by Michael Jordan have sold for millions in auctions.
- Louis Vuitton: Although Louis Vuitton’s designer focuses on handbags, this brand has ventured into the sneaker world for a unique collaboration. For example, Louis Vuitton partnered with Nike to release a limited edition Louis Vuitton x Nike Air Force 1, selling for nearly $400 thousand.
The Importance of Collectibles Insurance
Whether it’s a Patek Philippe watch or a limited edition Hermes Birkin handbag, luxury collectible items transcend their material worth and become a significant portion of a collector’s alternative investment portfolio. But as collectors add to their collection, they may overlook a crucial aspect of their investment strategy — a specialized insurance policy.
Like any other collectible item, luxury collectibles face various risk exposures, such as theft, damage, and loss. Because of their unique nature, luxury collectibles need more than a standard insurance policy that comes with a cap. This type of policy does not consider the total value of the collection, which, in the case of luxury collectible items, can go as high as millions of dollars.
A specialized collectibles insurance policy provides protection against:
- accidental damage
- loss during transit
- exposures to natural disasters
- and more
Quaker Special Risk is a leading insurance solutions provider with a long history of crafting specialized coverage solutions for our clients. We provide insurance agents exclusive access to a collectibles insurance policy. Contact us to unlock unparalleled protection for your client’s luxury collectibles today.