NEW YORK (FOX 5 NEWS) – In the Diamond District along 47th Street in Manhattan, nearly every storefront doubles as a pawn shop. But on the 3rd floor of a glass high rise, a loan company offers loans for a certain kind of designer handbag that some say is more valuable than diamonds or gold.
“Some of our bags are at the $4,000 range, others go up to the six figures,” said Eleanor Walper, a loan officer at New York Loan Company. “We were actually one of the first pawn shops to start giving loans against Birkin bags, Kelly bags, high-end luxury handbags like Chanel.”
New York Loan is not your typical pawnshop.
“We really work more with luxury items,” Walper said.
Think signed Andy Warhols, one-of-a-kind diamond necklaces and unique celebrity memorabilia like an MTV Moonman statue.
New York Loan is an offshoot of Beverly Loan in Beverly Hills, which bills itself as the pawnshop to the stars. Owner and CEO Jordan Tabach-Bank said his mother first starting loaning against the exclusive Birkin bags in the 1990s. He said the company currently loans against or purchases an average of 25 Hermes bags a month.
“Hermes beat the S&P and gold in a study that was done regarding annual rates of return,” Tabach-Bank said. “So an Hermes is quite an investment.”
New York Loan charges 4 percent interest monthly. Tabach-Bank said the default rate is just around 10 percent and lower than that for the high-end handbags.
“People do not want to lose these bags,” he said. “If they wanted to sell them outright they would have to begin with. There’s a reason they’re getting a loan against them — it gives them the opportunity to get them back in their closet where they belong.”
Of course, some bags don’t end up being claimed. New York Loan sells those at a somewhat discounted price. For example, one black leather Birkin valued around $12,000 is currently priced at $8,500.
New York Loan said the prices are always negotiable and these bags always go fast.