where I can see it,
hanging in my closet,”
Carrie Bradshaw said it in Sex and The City, showing her savvy business acumen, because the iconic Birkin from Hermes is proven to be a better investment than gold or shares!“a Birkin has increased
in value over 500%
in the last 35 years!”
“As a whole, the study findings show how stable the ultra-luxury industry has been over the past 35 years when compared to more traditional investment opportunities,” Evelyn Fox, founder of Baghunter, told Luxurydaily.com. “In particular, the study displays how high-end, rare and soughtafter luxury items such as Hermès Birkin handbags have never dropped in value, even during times of recession and economic difficulty.”
A standard Birkin bag cost $2,000 in 1980, then $2,750 in 1990, $4,000 at the turn of the century. Today the same Birkin bag sells for between $10,000 and $12,000.
Also from the Hermes, a standard Kelly bag could have been purchased in 1950 for $900. By 1960 the same bag cost $1,300, by 1970 it was $2,450, 1980 saw it sell for $4,000, 1990 for $5,100, and at the turn of the century it cost $7,400. Today, that exact bag is has increased in value to $9,250.
These amazing figures cannot be replicated by any traditional investment and far exceed the annualized returns of stock markets such as the FTSE All-Share Index. It is also very likely that the value of Hermès bags will continue to rise for the foreseeable future with demand increasing daily and even the most conservative estimates predict a rise in value of 8-10 times today’s market value in the next 50 years.
Purchasing an Hermes Kelly or Birkin isn’t as simple as wandering into an Hermes boutique, picking up a bag, paying with, and then walking away. Only a handful of very lucky ladies receive their Kelly or Birkin directly from Hermes each year. Others sit on waiting lists, expecting a phone call for years. Some are even told the waiting list is closed, slamming the door on any chance of buying a handbag directly from Hermes.
Hermès don’t sell these bags to just anyone. Celebrities and the super-rich receive priority. Next in line is people who have built up brand loyalty by investing in purchases from Hermes over a long period of time. But, even these people have no guarantee of Hermes crafting a coveted Kelly or Birkin just for them.
For 99% of women and investors, the secondary market is the only way to get your hands on one of these bags.
The first thing to understand is what makes these bags so expensive in the first place. Back in the 1950s, before Grace Kelly was pictured with the bag that would later bear her name, a new Kelly bag from Hermes would have cost under $1,000. In fact, at the turn of the century when a Birkin bag became the star of the show on “Sex in the City”, it was possible to purchase a Birkin for around $4,000. Today, however, the most basic Kelly bag would set you back something in the region of $10,000 (10 times as much as it cost in the 1950s) and the same Birkin that featured on that “Sex in the City” episode retails close to the $12,000 mark (triple the value in only 15 years!). Of course, these are only entry level prices, before you add on exotic skins, custom hardware, and other personal touches which can bring the price upwards of $100,000.
Kelly and Birkin bags reach these astronomical prices for several reasons. The first is the price changes which occur year on year at the discretion of Hermès. They know they have a valuable product and generally increase the prices by between 5% and 10% annually for a new bag.
Another reason is the craftsmanship and quality in every single bag created by Hermès. Each bag is created by one professional craftsman (although artist is probably a better term to describe them!), who is responsible for the bag’s creation from start to finish. This can take anywhere from 15 to 24-plus hours to complete.
Each bag is also repairable for life, meaning it can be passed down from mother to daughter, gaining value with every passing year. They are built to stand the test of time with each piece of leather created for longevity. There are also spa treatments and reconditioning services available to maintain Kelly and Birkin bags, helping them look like new 15, 20, even 50 years down the line.
Tips for investing:
- Kelly and Birkin bags are timeless, but know your colors when investing
- Long term investors should look at neutral colors such as gold, black, and etoupe
- Short term investors can look at new and seasonal colors
- Exotic skin and rare bags will increase in value at a faster rate than regular bags
- The condition of the bag will affect its resale value
- The secondary market is the easiest and most sensible way to purchase a Hermes bag
- Be extremely careful of fraudulent bags on the secondary market
- Deal only with trusted resellers and study the small details that show a bag as genuine or fake
source: British Vogue, BagHunter