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Birkin Bags And Their Upside Value Potential, According To An Hermès Expert They Have Outpaced Gold

Updated: May 6

As reported by Fortune via Yahoo Finance, the Birkin bag, a coveted fashion accessory from the luxury brand Hermès, has been making headlines for its astronomical value in the resale market. What started as a bag for the elite, has become a status symbol for the ultra-rich and a sought-after investment piece. The Birkin's exclusivity has only increased its desirability as it's not easy to come by and requires a considerable purchase history at the brand to be offered the chance to buy it. However, even the most loyal customers don't get to choose the exact model they want, and the style of the bags is rarely known ahead of time. The Birkin bag's value is much higher than its sticker price of around $12,000. 

“The resale value of particularly the Birkin and Kelly bags over the past 10 years has outpaced gold,” James Firestein, founder of luxury resale and authentication platform OpenLuxury, told Fortune.

Before launching his own company in 2022, Firestein worked as a luxury authenticator for ten years, including two years as the director of authentication at Rebag. During the tenure of his career, Firestein has witnessed a “perfect storm” of factors “bolster this wild ride upward.”

“I know several instances where people have doubled their money based on buying it 10 years ago, and reselling it today in pristine condition,” he said.

For some buyers, a Birkin bag isn't just a luxury item, but a worthy investment. Of the Birkin owners that Firestein has worked with, 25% of them keep the bags in storage as investments, while 75% use them. 

“It's similar to buying a Piccaso and holding it in your home, because you can look at it, you can enjoy it,” Firestein said. “But then you ship it off in a couple of years and trade it for something else.”

The value of an Hermès bag can increase tremendously with time, depending on its color, material, and condition. Resale or second-hand demand thrives partly due to the resale market allowing buyers more options than the Hermès store, where customers are granted one quota bag per year and rarely have the option to choose the exact model they desire. 

The steep price increase of the Birkin bag over the years has been driven by trend cycles and changing demand, so it can be a gamble.  

“I wouldn't say jump in with both feet at this point,” Firestein expressed. “But if you got it in 2012, and you sold in 2019, that’s different.”

Hermès, which began in 1837 as a maker of horse harnesses, has become a ready-to-wear and leather-goods powerhouse renowned for its craftsmanship over the course of six generations. The Birkin bag was conceptualized in 1984 when actress Jane Birkin said she couldn’t find a bag that suited her needs as a young mother—so she sketched her dream design on a sick bag, according to CNN. Jean-Louis Dumas, executive chairman of Hermès at the time, infused the bag with equestrian elements, giving it the signature Hermès look. “It was more of a subtle old money brand,” Firestein said of Hermès’ status prior to the Birkin craze.

The bag slowly gained "it bag" status in the '90s and 2000s, and it wasn't until the 2010s when the online resale market reached the masses that the hype went stratospheric.

Hermès' quality is top-tier, and unlike brands owned by LVMH and Kering, which often share factories, it only uses its own factories. Conglomerate-owned brands like Balenciaga, Gucci, and Saint Laurent also tend to use more mass-market materials that are cheaper and easier to get. 

“Their leather factories are only Hermès affiliates, and they only create Hermès leathers,” Firestein explained. “So you're buying into part of that heritage, but then you're also buying into a higher quality material that they've been using for many, many years.” 

When compared to other brands, Hermès’ quality is “top-tier,” Firestein said. And despite working 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.”

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