Chanel South Africa
Chanel Flap Bag (Image: Luxity)
  • South Africa's pre-owned luxury market is booming, with the country's biggest reseller reporting growth of 117% in 2021.
  • Handbags are especially popular, with Chanel leading the pack.
  • This is due to international travel restrictions, which have stopped South Africa's wealthy from splurging while on holiday or business trips.
  • For more stories go to www.BusinessInsider.co.za.

The resale market for luxury goods in South Africa is booming, particularly with brands that are hard to come by locally and almost impossible to buy abroad due to ongoing travel restrictions.

Luxury brands have bounced back from a dismal 2020, with LVMH – the holding company for Louis Vuitton, Christian Dior, Givenchy, Marc Jacobs, Kenzo, and others – reporting 56% growth during the first half of 2021. The net worth of Bernard Arnault, executive chairman of LVMH, has grown to $190 billion (R2.8 trillion), making him one of the richest men in the world.

And while the luxury retail sector has shown a resilient rebound amid the global pandemic which has tightened most pockets, the pre-owned luxury market in South Africa has seen exceptional success, according to a report by the country's biggest reseller, Luxity.

Luxity recently opened two new stores – in Nelson Mandela Square and Menlyn Maine – and recorded sales growth of 117% for the first half of 2021. Luxity's analysis of trends in the pre-owned luxury market shows a significant increase in returns for handbags, while shoes dropped in value compared to 2020.

READ | The pandemic didn't stop one South African from spending R220,000 on a second-hand bag

The value of pre-owned handbags by Chanel, the French luxury fashion house founded in 1910, has grown by 7% over the past year, overtaking Louis Vuitton and Christian Louboutin.

"This was influenced by a strong demand for the timeless brand as well as the fact that the company does not have a store in the country," Luxity noted in its market report.

"Therefore, with travel restricted, Chanel accessories could not be bought in any other way."

This is especially true for the Chanel Medium Classic Flap. While its retail price increased by only 5,21%, its resale value grew by 17,25%. "This resulted in Chanel once again taking the top spot of investment return when compared to gold over the tracking period starting in 2008," explained Luxity.

(Graphic: Luxity)
Chanel South Africa
(Graphic: Luxity)
Chanel South Africa
(Graphic: Luxity)

Unlike the luxury shoe category, which saw a drop compared to 2020 due to supply outweighing demand, Chanel handbags have become rarer due to pandemic-induced travel restrictions.

"Generally, most clientele that can afford a new Chanel handbag are travelling on a regular basis and Chanel is well represented in most popular travel destinations globally, besides on the continent of Africa," Michael Zahariev, co-founder of Luxity, told Business Insider South Africa.

"There is no way to import directly from Chanel as they do not sell online or virtually. Due to this, the only way to obtain a Chanel handbag would be through a pre-owned reseller locally, like Luxity. Therefore, with limited supply, Luxity only buys from locals, the price consumers were willing to pay for a pre-owned Chanel locally rose substantially as it is their only means of access… conversely now is a great to sell your unused Chanel handbags."

To demonstrate this increase in value over the last two decades, Zahariev points to a vintage Chanel Flap Bag which recently sold for R59,000. When the bag was purchased brand new in 1997, it cost around R5,000. 

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