Collectibles Report 2024 Part 3: handbags, wine & watches

Introduction

Handbags, wine and watches are among the most popular categories at Splint Invest.

In this blog we talk about those categories in details, providing not only performance data, but exclusive insights from our expert partners.

If you want to download and read the full Collectibles Report 2023/2024 in English, German or French, please click this link.

Handbags as Investment

Handbags, particularly those from luxury brands like Hermès, have established themselves as a solid investment category within the alternative asset space. These items not only serve as fashion statements but also as valuable assets that can appreciate significantly over time. The allure of limited edition, rare, and iconic designs often drive prices upwards, making luxury handbags an attractive option for investors seeking to diversify their portfolios. 

At Splint Invest, we collaborate with Procura London, led by Melissa Afonso, an expert with over a decade of experience in the luxury goods industry. Procura London specializes in sourcing investment pieces and heirloom treasures for discerning clients. Melissa's deep understanding of market trends and her ability to identify undervalued luxury items have been instrumental in helping our clients achieve impressive returns on their handbag investments. 

Handbags Monthly Performance Analysis 

Over the 12-month period from July 2023 to June 2024, the handbag market demonstrated steady growth, maintaining stability compared to traditional financial indices like the Swiss Market Index (SMI) and the STOXX 50. 

When comparing the performance of luxury handbags to traditional financial indices like the SMI and STOXX 50 over the past year, a few key trends emerge that highlight the unique characteristics of this asset class. 

Resilience During Market Volatility: The luxury handbag market, especially the for the coveted Hermès bags, demonstrated notable resilience, especially during periods when the SMI and STOXX 50 experienced declines. For instance, in September 2023, while the SMI dropped to 98.95 and the STOXX 50 fell to 94.9, the handbag index continued its upward trend, reaching 102.31. This suggests that the luxury handbag market is less sensitive to the broader economic conditions that typically impact financial markets. 

Steady Appreciation: Unlike traditional financial assets, which can experience significant fluctuations, the luxury handbag market showed a more steady and gradual appreciation. By June 2024, the handbag index had risen to 107.47, representing a consistent growth trajectory. This steady appreciation can be attributed to the enduring demand for rare and iconic luxury handbags, which are often viewed as timeless investments.  

Market Confidence in Luxury Assets: The consistent performance of the handbag market, particularly during months of financial market instability, indicates strong investor confidence in luxury assets. Handbags, particularly those from brands like Hermès, are seen as both fashion items and investment vehicles. The limited availability and high desirability of certain models contribute to their sustained value, making them less susceptible to the rapid market shifts seen in equities. 

Impact of Supply and Demand Dynamics: The luxury handbag market is heavily influenced by supply and demand dynamics. Despite annual price increases of 5 to 10% for Hermès bags, the supply still cannot meet the demand. These increases also drive-up prices on the secondary market. During the analyzed period, the steady increase in handbag values, even when traditional markets faced downturns, reflects the ongoing high demand for these rare items. 

Potential Risks and Market Correction: Despite the overall positive performance, it’s important to note that the luxury handbag market is not entirely immune to risks. Economic downturns, shifts in consumer preferences, and changes in the fashion industry could impact future valuations. However, the data from the past year suggests that the market has been robust, with luxury handbags continuing to appreciate even as other assets faltered. 

In conclusion, the comparative analysis shows that luxury handbags have performed well relative to traditional financial indices, particularly during times of economic uncertainty. This underscores their value as a diversified investment option. However, investors should remain aware of potential risks and continue to monitor market trends. The strong performance of handbags in the past year reaffirms their position as a stable and appreciating asset class, driven by scarcity, brand prestige, and sustained demand. 

Predictions and Trends for the Upcoming Year 

Looking ahead, the luxury handbag market is expected to continue evolving, with Hermès likely to modernize classic designs while introducing new, innovative styles. The SS24 collection has already hinted at a return to larger bag sizes, such as the 35cm and 40cm Kelly and Birkin bags, in warm neutral tones and the reintroduction of Box leather. There is also likely to be sustained demand for smaller, more functional bags like the Mini Kelly, but with a growing interest in vintage-style day bags. 

As the market continues to shift, investors who align with these trends and work with experts like Procura London will be well-positioned to achieve significant returns. 

 

Wine as Investment and our Expert  

Wine has long been considered a prestigious and reliable asset class within the alternative investment space. Its appeal lies not only in the potential for capital appreciation but also in its status as a tangible asset with a rich cultural heritage. Fine wine has demonstrated resilience during economic downturns, offering investors a way to diversify their portfolios while maintaining exposure to a stable and often appreciating asset. 

At Splint Invest, we are committed to providing our investors with access to the best opportunities in the wine market. To this end, we have partnered with WineFi, a next-generation investment platform for fine wine. Led by founder and CEO Callum Woodcock, WineFi combines cutting-edge data science with the qualitative expertise of its investment committee to select, source, and manage diversified portfolios of fine wine for their clients. With backing from SFC Capital, Founders Capital, and leading fine wine group Coterie Holdings, WineFi has quickly established itself as a challenger brand in the wine investment market. 

Wine Monthly Performance Analysis  

Over the period from July 2023 to June 2024, the performance of wine as an investment category exhibited a distinct pattern when compared to traditional financial indices like the Swiss Market Index (SMI) and the STOXX 50. 

Comparative Analysis: 

• Stability vs. Volatility: The wine index demonstrated relative stability compared to the financial indices, albeit with a downward trend. This reflects the nature of wine as an asset class, which tends to be less volatile but also less responsive to short-term market movements.
• Performance Gaps: While both the SMI and STOXX 50 recovered and achieved gains over the period, wine did not experience the same level of recovery, indicating that the wine market may be more affected by longer-term trends and market conditions rather than immediate economic cycles.
• Market Dynamics: The downturn in the wine index aligns with broader trends in the fine wine market, where high-growth regions like Burgundy and Champagne experienced declines. This contrasts with the performance of traditional financial markets, which benefitted from broader economic recovery and investor confidence. 

Possible Explanations: 

The relative underperformance of wine may be attributed to a cooling off period following the post-pandemic surge in prices, as well as a more cautious approach from investors in the face of economic uncertainties. 

The strong performance of the SMI and STOXX 50 suggests that traditional equities have benefitted from economic recovery, central bank policies, and perhaps a rotation back into risk assets as confidence improved. 

The stability of wine as an asset class could also reflect its appeal to investors looking for diversification and a hedge against more volatile financial markets, even though the returns over this period were muted. 

In conclusion, while wine underperformed compared to the SMI and STOXX 50 over the past year, it provided a more stable investment option for those looking to diversify their portfolios. The differences in performance highlight the importance of understanding the distinct dynamics of each asset class, particularly in times of economic uncertainty. 

Predictions and Trends for the Upcoming Year 

Looking ahead, the wine market appears to be stabilizing. While it may still be searching for its bottom, recent data suggests that the decline is leveling off. For instance, the Liv-ex 100, which tracks the 100 most traded wines on the secondary market, recorded its first positive month in April 2024 after a year of declines. 

WineFi's analysis indicates that current market conditions present significant opportunities for investors. With iconic assets trading at discounts to their Fair Market Value (FMV), there is potential for substantial gains as the market rebounds. As interest rates stabilize, it is expected that the fundamentals of the fine wine market will revert to pre-pandemic trends. Investors who are tactical in their asset allocation and take advantage of the current market conditions may achieve outsized returns in the coming year. 

Splint Invest Exit: Wine 

Burgundy and Champagne Portfolio 
In September 2023, Splint Invest successfully exited a well-curated wine portfolio consisting of six bottles each of Salon Mesnil 2006 and Cécile Tremblay Chapelle-Chambertin 2016. Acquired in December 2021 for €9,000, the portfolio was sold for €14,821.13 after all fees, delivering a remarkable net return of 64.7%. This exit highlights the potential for significant appreciation in fine wine investments, particularly in the highly sought-after Burgundy and Champagne regions. The success of this portfolio underscores Splint Invest's ability to leverage market insights and strategic timing to maximize returns for our investors in the wine sector. 

Interview with WineFi 

WineFi, founded by Callum Woodcock, is a next-generation investment platform for fine wine. The company combines cutting-edge data science with the qualitative expertise of its Investment Committee to select, source, and manage diversified portfolios of fine wine for its clients. Backed by SFC Capital, Founders Capital, and the leading fine wine group Coterie Holdings, WineFi employs a comprehensive four-step process that includes defining the investment universe, performing modeling and analytics, applying a qualitative overlay, and composing the final portfolio. This integrated approach ensures a well-rounded strategy for fine wine investment. 

Q: What is your track record over the last 12 months with investments in your field? 

WineFi: Our best performing exit over the past year was a case of Harlan 2010 (Napa Valley), which achieved a 27% total return from source to sale over just six months. Despite the broader market decline, we have grown AUM by an average of 41% month-on-month since January, solidifying our reputation as a challenger brand within the wine investment market. 

Q: Can you give us an overview of the market trends over the past 12 months? 

WineFi: The past 12 months have been challenging for the wine markets, with the Liv-ex 1000 index declining by 6.3%. This drop has been most pronounced in high-growth regions like Burgundy and Champagne. However, we have also seen that many wines have defied this trend, proving the value of a data-driven, stock-picking approach. The current market has also led to exceptional wines trading well below their Fair Market Value, presenting once-in-a-cycle opportunities for savvy investors. 

Q: What is your outlook for the upcoming 12 months and what trends do you foresee? 

WineFi: While the wine market is still searching for its bottom, we are starting to see signs of stabilization. The Liv-ex 100 recorded its first positive month in April 2024 after a year of declines, which is an encouraging sign. With interest rates stabilizing, we expect the fundamentals of the fine wine market to revert to pre-pandemic trends. However, the current market reveals many bright spots for wine investors, and those who are tactical in their approach may achieve outsized returns as the market recovers. 

 

Watches as Investment

In the world of luxury investments, watches hold a unique position, offering both aesthetic pleasure and significant financial returns. As timeless pieces of craftsmanship, watches from prestigious brands like Rolex, Patek Philippe, and Audemars Piguet not only serve as symbols of status but also as appreciating assets that can outperform traditional investments. Over the past decade, the market for collectible watches has expanded rapidly, driven by a combination of brand legacy, rarity, and growing demand from both seasoned collectors and new investors. 

Our partner, The 1916 Company, led by expert Sami Lachhab, brings extensive experience and insight into the luxury watch market. The 1916 Company has been at the forefront of the pre-owned luxury watch market, leveraging technology and deep industry knowledge to provide a transparent and trustworthy platform for buying, selling, and investing in high-end timepieces. Their expertise ensures that investors have access to some of the most sought-after watches, backed by comprehensive data and market analysis. 

Watches Monthly Performance Analysis 

Over the past 12 months, the performance of luxury watches as an investment category has shown some volatility, especially when compared to traditional market indices like the SMI and STOXX 50. Beginning at an index value of 100 in July 2023, watches have experienced a gradual decline, ending at 92.11 by June 2024. This represents an overall decrease of nearly 8%, while the SMI and STOXX 50 indices have both experienced growth over the same period. 

Comparative Analysis and Possible Explanations: 
The contrasting performance of watches against the SMI and STOXX 50 highlights a few critical points. First, the luxury watch market is significantly influenced by collector sentiment, economic conditions, and shifts in consumer preferences. While traditional indices have benefited from a broader market recovery, the watch market has been more subdued, likely due to its reliance on discretionary spending and the psychological factors that drive luxury purchases. 

Second, the watch market’s underperformance relative to the indices underscores the importance of market timing and brand-specific trends. For instance, while watches from high-demand brands like Rolex and Patek Philippe continue to hold value, the overall market has been less dynamic compared to equity indices, reflecting the current cautious approach of investors. 

In conclusion, while luxury watches remain a valuable asset class, their performance over the past year suggests a period of consolidation and correction, which may present buying opportunities for astute investors as the market stabilizes. 

Predictions for the Upcoming Year 

Looking ahead, the luxury watch market is expected to face both challenges and opportunities. On one hand, the global economic climate and ongoing conflicts could lead to another market correction. However, the enduring passion of watch collectors, who often purchase based on emotional connections rather than purely financial considerations, is likely to keep the market resilient. 

The continued trend of introducing modern interpretations of classic models, as seen with Patek Philippe and A. Lange & Söhne’s recent releases, will likely drive demand. Additionally, the rise of new independent watchmakers like Auffret Paris and Simon Brette indicates a growing interest in unique, handcrafted timepieces, which could capture the attention of collectors looking for the next big investment. 

Interview with The 1916 Company 

The 1916 Company, operationally led by Sami Lachhab in Switzerland, is a global leader in the pre-owned luxury watch market. The company provides a trusted platform for collectors and investors, offering a seamless and transparent experience in buying, selling, and investing in high-end timepieces. Leveraging cutting-edge technology and deep market insights, The 1916 Company ensures that clients can confidently navigate the luxury watch market with expert guidance and support. 

Q: What were the major happenings in the last 12 months in the watch market?  

The 1916 Company: The past year saw significant shifts in the luxury watch market, with Patek Philippe discontinuing the Nautilus 5980 and Aquanaut Travel Time 5164A models, reflecting a trend towards more luxurious gold alternatives. This move is expected to boost the value of steel models on the secondary market. 

There’s also a growing interest in smaller case sizes and vintage pieces from brands like Cartier and Piaget, offering strong investment potential at more accessible prices. Among new releases, A. Lange & Söhne’s limited edition Datograph Perpetual Tourbillon Honey Gold Lumen, priced at USD 660,000, has stirred mixed reactions, sparking debate about its long-term value. 

Q: How did the market develop in general from a price perspective? 

The 1916 Company: The luxury watch market has experienced significant fluctuations over the past year. After the record highs of 2022, prices began stabilizing around September 2023 following a period of correction, influenced by inflation and annual retail price increases of 4-7%. This initially deterred investment-focused buyers, but the market is now seeing the return of passionate collectors who buy watches as personal treasures rather than purely for financial gain. As prices have stabilized, these collectors have re-entered the market, driving prices upward again, though not to the extreme levels of 2022. 

On the retail side, demand remains strong despite economic challenges, but there’s a shift in client expectations. Customers now demand higher levels of service and education from sales advisors, particularly for brands like Audemars Piguet, which must now be more proactive in their sales approach. Demand for independent watchmakers like F.P. Journe, De Bethune, and Rexhep Rexhepi also remains high, with limited production ensuring strong prices in the market. 

Q: What are upcoming interesting projects or tendencies in the market? 

The 1916 Company: Looking ahead, several trends could shape the luxury watch market. While global economic uncertainty might lead to another market correction, passionate watch collectors are likely to continue driving demand, viewing their timepieces as more than just investments. Independent watchmakers like Auffret Paris and Simon Brette are gaining attention with their artisanal collections, potentially signaling a shift towards bespoke watchmaking. Additionally, the growing use of technology, such as blockchain for authentication and digital IDs, is set to enhance transparency and trust in the market, benefiting both new and seasoned collectors. 

 

Collectibles Report 2023/2024 

As we look back over the past year, the Collectibles Report 2023/2024 presents a comprehensive view of the alternative investment landscape, showcasing significant achievements across various asset categories. Our collaboration with leading industry experts in art, wine, cars, handbags, and watches has enabled us to outperform traditional market benchmarks in most segments, delivering tangible value to our investors. 

The art market faced a period of contraction, particularly in the last six months, yet Splint Invest, in partnership with Artemundi and Maddox, successfully navigated these challenges. We saw impressive exits, such as the sale of Marc Chagall’s The Sleep of Love with a net return of 15.4% in just two months, and Albert Willem’s A Difficult Moment During the Driving Test yielding a 26.2% ROI over 11 months. These successes highlight our ability to identify and capitalize on market opportunities, even in a contracting environment. 

While the broader wine market has seen a downturn, with indices like the Liv-ex 1000 reflecting a 12.0% decline, our strategic acquisitions and exits have proven resilient. Notably, our Burgundy and Champagne portfolio exit in September 2023 delivered an impressive 64.7% net return. This underscores the importance of a data-driven approach in navigating the complexities of the wine market, a philosophy we continue to champion through our partnership with WineFi. 

The classic car market, despite its post-COVID correction, remains a robust investment category. Our collaboration with TheCarCrowd has yielded impressive returns, with highlights including a 27.6% annualized return on a Lancia Delta Integrale and a 24.0% return on a Renault Clio V6 Phase 1. The car market’s ability to withstand broader economic pressures and deliver consistent returns reinforces its status as a valuable alternative investment. 

Luxury handbags have demonstrated remarkable resilience, with our investments outperforming the broader market. The handbag index showed a steady increase, culminating in a 7.5% gain over the year, despite broader economic headwinds. Key auction results, such as the sale of the Birkin 20cm Faubourg for HKD 2,205,000 (EUR 258,889), illustrate the enduring appeal and investment potential of this asset class. 

The watch market faced challenges over the past year, marked by price corrections and shifting consumer preferences. However, the long-term value of investment-grade watches remains intact, with significant interest in pre-owned luxury timepieces. Our partnership with The 1916 Company ensures that we are well-positioned to capitalize on these trends, even as the market stabilizes. 

The past year has demonstrated the resilience and potential of alternative investments, even in the face of global economic uncertainties. Each asset category has faced its unique challenges, but the overarching trend is clear: with the right expertise and strategy, alternative assets can provide strong returns and diversification benefits that traditional investments may not offer. The key to success lies in our ability to adapt to market conditions, leverage expert insights, and strategically time our exits. 

As we move forward, we invite our readers and investors to explore the diverse range of investment opportunities available through Splint Invest. Whether you are looking to diversify your portfolio, hedge against market volatility, or explore unique and tangible assets, Splint Invest offers a platform built on expertise, data-driven insights, and a proven track record of success. Join us in navigating the exciting world of alternative investments and discover how you can achieve your financial goals with Splint Invest.