The value of a Birkin bag skyrockets as soon as it leaves the Hermès boutique.
This is partly because not just anyone can buy the bag. Only customers with a significant purchase history with the brand are offered the opportunity to purchase a “quota bag,” such as a Birkin or Kelly.
But even the most loyal Hermès buyers do not have the opportunity to choose exactly the Birkin model they want. The brand allows boutiques to purchase a certain number of Birkins per season, and the style of the bags is rarely known in advance, according to Sotheby’s. The notoriously opaque process, nicknamed the “Hermes game,” only generated more desire for the bag — and even became the subject of a class-action lawsuit. trial this month.
Looking to bypass the Hermès game and get the bag they want, handbag enthusiasts are shelling out tens of thousands of dollars on the resale market. Thanks to its exclusivity and status as an investment piece, the value of a Birkin bag is far greater than its sticker price of around $12,000.
“The resale value of Birkin and Kelly bags, in particular, over the last 10 years has exceeded that of gold,” James Firestein, founder of the luxury goods resale and authentication platform. OpenLuxurysaid Fortune.
Before starting his own company in 2022, Firestein spent a decade as a luxury authenticator, including two years as director of authentication at Repack. Over the course of his career, Firestein has witnessed a “perfect storm” of factors “reinforcing this crazy upward adventure.”
“I know of several cases where people doubled their money by buying it 10 years ago and reselling it today in perfect condition,” he said.
“It’s like buying a Picasso”
For some buyers, a Birkin bag is not a high-end piece of jewelry, but a profitable investment. Of the Birkin owners he’s worked with, Firestein estimates that 75 percent actually use the bags, while the remaining 25 percent store them as an investment.
“It’s like buying a Piccaso and keeping it in your home, because you can watch it, you can enjoy it,” Firestein said. “But then you ship it in a few years and trade it for something else.”
The value of an Hermès bag can increase significantly over time, Firestein said, depending on its color, material and condition. Second-hand demand is so high in part because the resale market gives buyers more options than the Hermès store, where customers are allowed one bag per year and rarely have the chance to choose the exact model that they wish.
Firestein said the biggest price increase he saw was on a Black Togo 30 Birkin that doubled in value in 5 years. But price increases can be driven by trend cycles and changing demand. So it can be a “gamble,” he said.
“I wouldn’t say jump in with both feet at this point,” he said. “But if you got it in 2012 and sold it in 2019, that’s different.”
The Birkin legend
Before its handbags were seen on the arms of Jane Birkin and Cardi B, Paris-based Hermès began in 1837 as a manufacturer of horse harnesses. Over six generations, it has become a reference in ready-to-wear and leather goods renowned for its artisanal know-how.
As for the iconic Birkin bag, here’s how the legend goes: In 1984, the late actress Jane Birkin sat next to Jean-Louis Dumas, then executive chairman of Hermès, on a flight from Paris to London. Birkin said she couldn’t find a bag that met her needs as a new mother. So she drew the picture of her dreams on a sick bag, according to CNN. Dumas infused the bag with equestrian elements, giving it the signature Hermès look.
“It was more of a subtle, old brand,” Firestein said of Hermès’ status before the Birkin craze.
The Birkin slowly reached “it bag” status thanks to being spotted on the arms of many celebrities in the 90s and 2000s, and beyond. Sex and the city. But it wasn’t until the 2010s, when the online resale market hit the mainstream, that the hype became stratospheric.
Firestein credits e-commerce with allowing shoppers to purchase a pre-owned Hermès bag from any part of the world. At the same time, online forums made it possible to share the secrets of the Hermès game formerly reserved for the 1%. The Birkin has become a collector’s item over time and clandestine demand continues to fuel the resale market.
What’s in the bag?
Some people may desire Birkin bags because they are very difficult to obtain, but fans also celebrate the brand’s artisanal craftsmanship and 200-year heritage of craftsmanship.
Unlike brands owned by LVMH and Kering, which often share factories, Hermès only uses its own factories, Firestein said. Brands owned by conglomerates like Balenciaga, Gucci and Saint Laurent also tend to use more mainstream materials, which are cheaper and easier to obtain, Firestein says.
“Their leather factories are solely subsidiaries of Hermès and they only create Hermès leathers,” he said. “So you’re buying some of that heritage, but you’re also buying a higher quality material that they’ve been using for many, many years.”
Compared to other brands, Hermès’ quality is “top-notch,” Firestein said. And although he works with 43 different luxury brands, he admits to having an affinity for Hermès bags.
“They’re made to last for generations,” Firestein said. “And they’re just beautiful luxury objects at the end of the day, almost like sculptures.”