A global symbol of status and wealth, Hermès handbags – particularly the Birkin and the Kelly – are among the most coveted and expensive handbags in the world. But are Hermès handbags a good investment?
The value of a Hermès handbag
Hermès handbags retail for anything from R150,000 to R3 million each.
What makes them unusual luxury items is the fact that on the secondary market, they often sell for more than their original price.
Demand outstrips supply
The price of a Birkin depends on the hide, the colour and the hardware fixtures, which include diamonds and white gold.
A standard Birkin that retailed for R30,000 in 1980 can sell today for between R150,000 and R180,000.
The main reason for their appreciating value is simple economics. Demand outstrips supply.
The bags are made in limited quantities with waiting lists of six years or more – if you can get on one.
Why a Hermès handbag is a good investment
The Himalaya Birkin is handmade from Nile crocodile hide and has more than 240 diamonds and 18-karat white gold hardware.
It’s the rarest and most valuable Hermès handbag.
In 2016, a matte white Himalaya Birkin became the most expensive bag ever sold. It fetched US$300,168 at auction in Hong Kong.
The following year, a Himalaya Birkin broke its own record. It sold for £236,750 (R4.4 million) in London.
Handbag ahead of gold
Birkin bags have outpaced the price of gold over the last 35 years.
So Hermès handbags are indeed a good investment – especially if you can get your hands on a Birkin.
They stand up against traditional investments, including diamonds, stocks and real estate. Some estimate that their value will double in the next 10 years.
Appreciating value of Hermès bags
In 2017, a study released by BagHunter showed that the value of the Hermès Birkin has increased 500% in the last 35 years, an increase of 14% each year.
A bag in reasonably good condition can fetch up to more than 80% of its original sales price.
A bag in excellent condition can fetch more than 100%.
And a bag that’s in mint condition can fetch more than 120% of its original price at resale.
Even as online resellers have made more Birkins and Kellys available, the prices have yet to go down.
Buying a Hermès bag
If you fancy buying a Birkin or Kelly bag directly from Hermès, think again.
The Hermès Birkin is named after actress Jane Birkin. In 1983, she sat next to Hermès’ chief executive, Jean-Louis Dumas, on a flight. She complained about not being able to find a good leather weekend bag. So he designed one for her.
Hermès gives celebrities and the super-wealthy preference. Many hopeful buyers will simply be told the waiting list is closed.
For the vast majority of consumers, the secondary market is the only way to get access to one of these bags.
Where to find a Hermès bag
Second-hand luxury dealers and consignment stores, like Privé Porter and TheRealReal, offer authenticated bags in excellent condition. In South Africa, Luxity is the largest source of pre-owned luxury items.
If you’re buying a Birkin or Kelly bag as a long-term investment, neutral colours and popular sizes are key. Bolder, seasonal colours and shapes are best for short-term investments.
Pawning a Hermès handbag
Luxury handbags are one of the fastest-growing asset classes.
It’s increasingly common for owners of Hermès bags to use them as collateral for loans. Once a loan and agreed interest have been paid back, the bag is returned to the owner.
At Lamna, we offer fast, discreet loans against the value of a wide range of assets, including luxury handbags. Typically, you can expect the loan funds on the same day you apply.
Client borrows R10,000 for 90 days.
Total Cost of Loan
Fixed rates range from 36% to 60% APR and payment options range from minimum 3 to maximum 24 months. Apart from the initiation and monthly fees shown below, the only additional fee is credit life insurance if the borrower does not have this already.