The vagaries of the art, stock, real estate and commodities markets are many and great, but the redoubtable Hermès Birkin bags do seem to hold their value, and even then some. According to a recent study by Baghunter (an openly pro-handbag entity), the Birkins have performed better than the Standard and Poors 500 ratings over the last thirty-five years. The S&P 500 brushed in slightly less than 12 per cent gains over that time. The Hermès Birkin put in a chunky 14.6% rise over the decades.

One cannot, necessarily, retire on one’s Birkins, as one could on a 401k of stocks and bonds, although its arguable that the stylish denizens of the catwalks, front-rows, and nightclubs such as Victoria Beckham and Kim Kardashian, pictured below, probably have the required critical mass of Birkins, and other Hermès products, stashed in the walk-ins so that they could, if pressed, scrape together a tidy few dollars by consigning them. One senses that it would take a lot to separate the misses Beckham and Kardashian from their Birkins, or from their Hermès collections generally, and that alone could never support their lifestyles. But would still be quite a lot of money.

 

Story behind the bag

In 1983, Hermès chief executive Jean-Louis Dumas was seated next to Jane Birkin on a flight from Paris to London. She had just placed her straw travelling bag in the overhead compartment for her seat, but the contents fell to the deck, leaving her to scramble to replace them. Birkin explained to Dumas that it had been difficult to find a leather weekend bag she liked.

In 1984, he created a black supple leather bag for her, based on a 1982 design. She used the bag initially, but changed her mind because she was carrying too many things in it: “What’s the use of having a second one?” she said laughingly. “You only need one and that busts your arm; they’re bloody heavy. I’m going to have to have an operation for tendonitis in the shoulder.”Nevertheless, since that time, the bag has become a status symbol.

 

Can the Birkin Bag Survive the Resale Market? (NYTimes)

Once upon a time, the Hermès Birkin could arguably have been called the rarest handbag in the world. Urban myths abounded about how to buy and who was allowed to buy; rumors of wait lists were taken as gospel; and the lucky few able to acquire a bag guarded their insider status as if it were a state secret. Then the fashion resale market took off.

Another digital player, the market-disrupting e-commerce consignment website the RealReal, has more than 300 Birkin bags available for purchase, including a shiny midnight-hued crocodile Birkin and a blindingly bright red Birkin. StockX, the resale site known largely for its system of selling the buzziest sneakers as if they are stocks, has expanded its offerings to handbags, including the most coveted Hermès bags; it currently has 235 up for grabs.

Together with assorted other resale players, like Rebag, LePrix, Baghunter and Vestiaire Collective, along with Hermès-specific sellers like Jane Finds, such sites have made it easier than ever for consumers to find what were once almost mythical accessories. Luca Solca, a senior analyst for luxury goods at Bernstein, an investment research and management company, estimates that there are now more than a million Birkins in the market.

 

Does it risk dilution and, even worse, devaluation of both value and allure?

 

“There was a waiting list at one point, but because so many people wanted these bags, a list simply became unmanageable,” said a former employee, speaking anonymously because of the nondisclosure agreement he signed. Hermès refuses to comment on the method for bringing home a Birkin.

Jonathan Rimer, a former floor director at the Hermès flagship in Beverly Hills, Calif., attributed the bag’s elusiveness to a simple problem of supply and demand, as did Robert Chavez, the Hermès president and chief executive for the Americas, who announced at last year’s Skift Global Forum that “demand for the Birkin bag continues to be much higher than the supply.”

 

As of now, demand for Birkins actually seems to be rising with supply. The RealReal said that consumer searches on its site for Birkin bags have increased more than 7.5 times over the last three years with sales nearly tripling.

And the Hermès bottom line does not seem to be suffering. According to its recently released 2018 revenue report, it experienced a 10.4 percent rise in consolidated revenue for 2018, topping $6.7 billion.

At Privé Porter, Mr. Berk said, “More and more collectors are opting to pay us $19,000 to get the exact same — never used — bag” that they cannot get from Hermès for $12,000.

 

 

Ms. Beckham’s Himalaya Birkin was reportedly chased down some years back by her husband, the retired soccer player David Beckham (as an outright gift or as a super-over-the-top gesture of atonement for an as-yet-unnamed husbandly offense, it matters not which) for an estimated $90,000.

If we take it that Mr. Beckham bought Mrs. Beckham a new, not-pre-owned thing, which is a reasonably safe assumption, then we could take that as a free-gray-market “base price” for a semi-recent Himalaya.

The Himalaya auctioned on November 28 in Hong Kong was not even the most expensive handbag ever auctioned — that distinction goes to a — you guessed it — Himalaya Birkin also auctioned in Hong Kong, for the eye-watering price of $299,000 in 2016. Even so, for its (comparatively) modest $135,000 price tag, this week’s Himalaya, manufactured by the company in 2016, still pulled in — admittedly from an overheated auction market — $45,000 more than David Beckham spent on his wife’s Birkin. In the two years since its manufacture.

Which is saying a lot about the sheer level of rabid must-have-that-thing desire that Hermès has been been able to create around the Birkin brand and around the Himalaya bags in particular. The white niloticus crocodile, itself, is quite a rare beast, and yes, the Hermes crocs are farm-raised and “ethically” dispatched. The name for this Birkin comes from the snowy gray that the tanning process lends the skins. It takes the Hermès craftsmen a year to make one of the things.

 

So, what we may discern from that is, with an esteemed auction house such as Christie’s as your vendor, the ‘interview’ about whether you’re the type of person who should own an Himalaya Birkin would not occur. One’s ‘suitability’ would be restricted to the auction house’s ordinary vetting of paddle-holders’ bank accounts. We can’t say that that’s the reason the bags hold, or increase, their value at auction. All Hermès bags do seem to do that.

But the Hong Kong sale, to whom-ever, does also make clear that one good way to bypass that fearsome Hermès interview – the accessories equivalent of passing muster at a country club – would be to snag a Birkin or three as they come under the hammer.

 

For instance, gold reached a peak average price during this period in 2011 at US$1,571.52, but also reached an average low of US$271.04 in 2001.

“In the same time frame, Hermes Birkin handbags have increased in value year on year, offering an average annual increase in value of 14.2%.

“However, unlike the S&P 500 and gold markets, the value of Hermes Birkin handbags has never fluctuated downwards and has steadily and consistently increased. The bags experienced a peak surge in value in 2001, increasing in value by 25%, and with the lowest increase in 1986 when the value went up by 2.1%.”

Baghunter said that in 2016, the safest and least volatile investment market was the Hermes Birkin handbag.

Baghunter noted that S&P 500 stocks and gold were subject to both positive and negative fluctuations but that Hermes Birkin handbags had only experienced various levels of positive fluctuation since their introduction 35 years ago.

This also demonstrated the risk involved in investing in the S&P 500 and gold markets, it said, adding: “On the other hand, an investor who purchased a Hermes Birkin handbag would enjoy a profitable return regardless of when they decided to cash in as the value has only risen since 1980. This makes Hermes Birkin handbags by far the least risky investment of the three. While economic factors affect the value of the S&P 500 and gold, the exclusivity of Hermes Birkin bags has seen them maintain and increase their value, even during times of recession.”