How Bags Became a Secondary Market With Better Liquidity Than Venture
- Mitt Chen
- 4 days ago
- 5 min read
Partners. Fellow allocators. Closet raiders with wire authority.
Let’s skip the pleasantries and start with the heresy:
In 2024, the cleanest exits some family offices had were not IPOs, not secondaries, not tender offers — but handbags.
Not companies. Not tokens. Bags.
While venture capital was busy extending fund lives, inventing new acronyms for “down round,” and pretending DPI is a vibe, the global handbag market did something deeply offensive to modern finance: It cleared.
Cash bids. Visible pricing. Buyers who actually wanted the asset — not the optionality of flipping it to someone dumber.
If that sentence bothers you, you’re still confusing prestige consumption with capital behavior.
This letter is not about fashion. It’s about liquidity honesty.
The three-sentence confession (read slowly)
Luxury handbags have quietly become one of the most efficient secondary markets on earth, because they price emotion, scarcity, and brand trust better than most financial instruments price risk.
Auction houses, resale platforms, and private dealers now provide faster, clearer exits than early-stage venture — with fewer committees and no narrative gymnastics.
And the reason tokenization keeps sniffing around this market isn’t hype — it’s because the plumbing already works, which is more than can be said for most “real-world asset” fantasies.
That’s the trade. Everything else is commentary.
Market posture (the conversation no one publishes)
Every allocator claims to love “real assets.”What they mean is assets that feel respectable at dinner.
Bags don’t qualify. Which is exactly why they work.
Handbags sit at the intersection of:
controlled supply
global demand
emotional inelasticity
and visible price discovery
That combination is rare. And when it appears, capital eventually shows up — quietly, and late.
The smart money didn’t decide to invest in bags.It noticed they were easier to sell than half their portfolio.
Signals & numbers (because feelings still need receipts)
A few inconvenient facts, stripped of marketing gloss:
The global luxury resale market now exceeds $50–60B annually, growing materially faster than primary luxury sales.
Handbags are one of the highest-liquidity subsegments within resale, ahead of apparel and jewelry in turnover velocity.
Major auction houses now treat handbags as a core category, not a novelty lot.
When Sotheby’s and Christie’s give bags dedicated catalogs, condition reports, and estimate bands, that’s not fashion commentary — that’s financial infrastructure.
More uncomfortable data point:
Certain Hermès Birkin and Kelly models have shown multi-year price appreciation comparable to equities, with volatility that looks suspiciously tame compared to venture portfolios marked by optimism and prayers. Returns are not the headline. Liquidity is.
Why venture looks bad by comparison (and no one admits it)
Let’s be adults.
Early-stage venture today looks like this:
10-year lockups (minimum)
pricing determined by whoever wrote the last check
exits dependent on macro, regulators, and a buyer who still has a balance sheet
“secondaries” that feel like pawn shops with term sheets
Now compare that to the bag market:
known buyers
multiple exit channels
global demand not tied to GDP growth
no founder risk, no burn rate, no pivot
You don’t need to love bags to see the asymmetry. You just need to stop lying to yourself about liquidity.
A field case (real, unglamorous, instructive)
A European family office — old capital, low drama, allergic to anything that needs a Telegram group — needed to reallocate low seven figures quickly after pulling back from private tech.
They did not sell fund positions.They did not wait for a GP-led.
They liquidated part of a handbag inventory accumulated over a decade.
Process:
18 Hermès pieces
split across two auction houses and one private dealer
staggered over ~60 days to avoid signaling
Outcome:
cleared above internal appraisal
settlement faster than most private credit paydowns
zero reputational noise
The CIO later said, dry as a funeral:
“It was easier than selling growth equity. And less insulting.”
That’s not a flex. That’s a warning sign for traditional markets.
Behind the curtain (what the respectable press won’t print)
Let’s remove the silk gloves.
1. Bags price desire, not projections
You can’t spreadsheet longing. Which is why bags trade more honestly than businesses still inventing their purpose.
2. Brand behaves like sovereign credit
Hermès doesn’t need leverage. It issues scarcity. Waiting lists function like capital controls.
3. Authentication replaced regulation
Third-party authenticators, auction vetting, and platform guarantees quietly did what regulators never could: create trust without slowing trade.
4. The market is global by default
A Birkin clears in Paris, Hong Kong, Dubai, or New York with minimal translation — cultural or financial. Try doing that with a Series B SaaS company.
5. Emotion is not a bug — it’s the moat
In downturns, people don’t stop wanting symbols. They stop funding narratives.
That distinction matters.
Auction houses: the accidental geniuses
Auction houses didn’t “pivot” to handbags. They recognized something obvious:
Bags behave like art with better turnover.
By applying art-market mechanics — estimates, provenance, condition sensitivity — they created:
reference pricing
vintage stratification
and institutional comfort
Once that happened, bags stopped being “items” and became assets with comps.
That’s the moment allocators pay attention.
Resale platforms: the messy clearing layer
Now for the unsexy middlemen who make the market actually function.
Platforms like The RealReal, Vestiaire Collective, and StockX are not fashion startups.
They are:
inventory normalizers
authentication bottlenecks
price discovery engines
Margins are ugly. Fraud exists. Logistics are painful.
Good. That’s how real markets look before consultants ruin them.
These platforms don’t generate alpha — they enable it. Confusing the two is how people lose money.
Tokenization (inevitable, boring, misunderstood)
Let’s address the blockchain question before someone else does it badly.
Tokenization is not coming because bags need it.It’s coming because capital wants optionality.
Fractional exposure.Collateralization.Transferability without shipping vaults across borders.
But here’s the rule that kills 90% of tokenized-asset pitches:
If the underlying market doesn’t already clear, tokenization just adds noise.
Bags clear.
That’s why this works — and why most other “real-world asset” experiments feel like cosplay.
Expect the winning implementations to be:
dull
compliant
institutionally boring
Which is exactly how infrastructure succeeds.
A Vault note (this was not meant for public eyes)
One resale operator, during a Vault intake, put it bluntly:
“We don’t sell bags. We sell access — to time, to status, to stories someone else couldn’t get.”
That’s not branding. That’s economics with lipstick.
You know where the rest of that file lives.
How sophisticated capital actually plays bags
This is not advice. It’s observation.
Serious players tend to follow a few rules:
Buy icons, not trends. Permanence beats novelty.
Condition over storytelling. Dust bags matter more than anecdotes.
Diversify exit channels. Auctions, private dealers, platforms — all matter.
Never confuse platforms with investments. Infrastructure is not alpha.
Assume liquidity exists — until it doesn’t. Size positions accordingly.
The amateurs chase the next Birkin professionals accumulate what never stopped clearing.
Risks (because reality still applies)
Let’s not romanticize.
Authentication failures happen.
Market sentiment shifts.
Platform policies change.
Overexposure to one brand is still concentration risk.
Liquidity is real — but not infinite.
And the most dangerous risk of all?
Falling in love with the asset.
Once you start justifying holds emotionally, you’ve crossed from allocator to collector. That line is thin, and expensive.
An allocation thought experiment (purely hypothetical, obviously)
If someone insisted on allocating capital here — purely as an intellectual exercise — it might look something like this:
40% icon handbags (Birkin, Kelly, historical Chanel)
25% auction-arbitrage inventory
20% private dealer relationships
15% optionality plays (storage, logistics, token rails)
Not a fund. A posture.
Closing shot
Handbags didn’t become financial because someone white-papered them.
They became financial because they behaved better than assets that were supposed to be.
If that offends you, you’re probably long the wrong things.
Further details exist — where they always do — for those who know where to look.
…and that’s all I’ll say until we’re off this channel.
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