How the next generation is driving the luxury handbag market

The U.S. luxury handbag market is projected to grow from $10.8 billion in 2024 to $16.9 billion by 2033¹, with nearly 60 percent of buyers now Millennials or younger. Value is determined by brand, rarity, materials, age, size, condition, and provenance, while a booming secondary market and artistic collaborations continue to fuel demand. With handbags now functioning as major investments, specialized Valuable Articles Coverage is essential for helping to protect these assets.

While luxury handbags have always been appreciated for their century old craftmanship, this perception has evolved as younger buyers now view heritage handbags as investments. However, most next gen collectors don’t have the contacts to purchase luxury bags through the primary market. To buy a Hermès Birkin or Kelly bag from a boutique, a buyer needs to have a relationship with a Hermès sales associate. Even then, the bag offered may not be in the color and size wanted, and there may be a limit of two quota bags per year. These factors have led to a thriving secondary market, which allows collectors to skip the line and access the latest limited edition or rare vintage pieces. 

Auction houses that did not have major handbag sales a few years ago now have dedicated luxury departments with handbags as a key component. With sought after items from luxury handbag designers like Hermès, Chanel, and Louis Vuitton, auction houses are actively attracting younger buyers. In fact, according to Christie’s, nearly 60% of handbag buyers are Millennials or younger.²

In addition to major luxury brands, handbags featuring artistic collaborations, blending art and fashion, and increasing cultural cachet are popular among younger generations like Gen Z these days. For example, the reissue of Louis Vuitton x Takashi Murakami in 2025 is poised to be a resale star, as historically LV x Murakami bags have resold at 50% or more above retail.⁶

• Authentication and documentation – Buy from a trusted seller who is a specialist. Look for the original packaging including the authenticity card, receipt, original dust bag and box, which can help to verify authenticity.
• Rare materials – Crocodile and alligator Hermès bags often fetch prices in the multiples of their calfskin equivalents. Exotics like ostrich and lizard command even higher prices.³
• Exclusivity – Limited editions, collaborations, or rare handbags can significantly impact demand and drive higher values. For example, recent Hermès “it” colors such as Beton, Vert Verone, or Rose Sakura command huge premiums, especially when supply is low.⁴
• Brand and Design – Iconic designs like the Hermès Birkin and the Chanel 2.55 Flap are timelessly in demand and are more likely to hold their value. Modern interpretations like the smaller Hermès Kelly 20s and Mini Birkin’s have surged in popularity among younger buyers.⁴
• Condition – If you’re thinking of buying without seeing a bag in person, ask for detailed photos and a condition report. Is the bag in pristine condition or does it show signs of wear in key areas like the corners, hardware, and interior? Unused “store fresh” Hermès Birkin or Kelly bags can sell for double, or triple used equivalents.⁴
• Provenance and cultural narrative – Jane Birkin’s personal Hermès prototype sold at Sotheby’s Paris for over $10 million, shattering expectations and becoming the most expensive fashion accessory ever sold in Europe. In this case, the owner and history drove the price.⁵