Hermès Birkin handbags skyrocket in price amid the pandemic



The resale price of Hermès Birkin bags during the pandemic has reached a record-high difference from the official retail price.  According to information from Christie's, among the two most expensive handbags ever sold in the history of this famous auction house, there is a Birkin made from crocodile skin.  The bag changed hands for nearly $390,000 in November last year.  The other bag is also a Hermès bag of the Kelly line, priced at nearly $450,000.

At Prive Porter, a bag dealer, the price of Hermès Berkins is currently 50-100% higher than the official retail price. Even “some of the bags in the collectible edition cost 10 times more than the retail price”- said director Jeffrey Berk.

 A product of French luxury brand Hermès, the Birkin bags have a retail price ranging from $9,000-500,000.  Each year, Hermès produces only a very limited number of these bags.  Buying a Birkin directly from Hermes is extremely difficult – usually only celebrities can do it, or at least the guest must be someone with a history of shopping at Hermès.  Therefore, the resale price of Hermès bags is seen as a reliable indicator of demand.

The unabated demand for Birkin bags is another sign of the widening gap between rich and poor during the pandemic.  While millions of Americans will lose their jobs in 2020, the country's wealthy class have been largely unaffected by the slowdown in economic growth, and they still keep their comfortable spending habits, just change where they spend their money.

Hermès Birkin handbags skyrocket in price amid the pandemicHermès handbags - Alternative investment channel / ph: Christie's

People who buying Birkin or Kelly bags are suddenly not allowed to travel anymore.  Instead they buy more houses or a Bentley supercar. They have a lot of cash and need to spend on luxuries.

 Prive Porter opened its first store last November, at the upscale Brickell City Center mall in Miami.  This shop is truly a "wonderland" for Hermès handbag lovers.  In the store there are always Birkin and Kelly bags with a total value of at least $2.5 million on display. 
Mr. Berk revealed that the trend of buying Birkin bags during the pandemic is in smaller sizes, and "pink has always been the most popular color when it comes to Hermes bags".

 Among the most expensive Birkin bags in the Prive Porter store today is a pair of small bags, with a width of only 20 cm.  A similar pair of bags are also on display in the glass doors of the Hermès boutique in Paris, one during the day and the other at night.  The price of this pair of bags is 450,000 USD.

When the US locked down to fight Covid last year, Mr. Berk thought the luxury goods market would go downhill.  “But then March and April of last year turned out to be the time when we had the highest revenue ever,” he said.  In those two months, Prive Porter generated $3 million in monthly sales, more than double what it was in the previous months.

Hermès handbags - Alternative investment channel

 Another luxury goods company, The RealReal, also reported a sharp increase in demand for Birkin bags during the pandemic.

 “It seems paradoxical, but in a year when most people are confined to their homes, demand for expensive handbags is unbelievably high,” said Sash Skoda, head of womenswear at TheRealReal stated.  Ms. Skoda emphasized that sales of Hermes products at TheRealReal in 2020 increased by more than a third compared to the previous year.  And among them, the Birkin bag "is one of the most popular items, especially among millennial customers" (those aged 25-39).

 At TheRealReal, the best sellers are also the small Birkin, 25-30 cm wide.

 Ms. Skoda said that demand for Birkin bags in 2021 remains high and resale prices continue to have a large difference from the company's official retail prices.  Year-to-date, the resale price of Hermès bags has increased 28% year-on-year, led by Birkin bags, with an average resale price of $4,000 higher than in the same period last year.

 With such a sharp increase in the price of bags, Ms. Skoda thinks that now is an opportunity for Birkin bag owners to resell the bag to earn a large profit.

 Entrepreneur Kay Cola - who founded the skin and hair care company OrganiGrowHairCo in 2016 - said she used to invest in stocks, real estate and cryptocurrencies in the past. Last year, the Birkin handbag caught Cola's attention while she was looking for a new investment channel.  “The Birkin bag interests me because the price goes up a lot from year to year,” says Cola, a Grammy Award-nominated songwriter.

“I like the style of the bag, very classy.  And the bag is also an investment.”  Within a few months, Cola spent more than $500,000 to buy 10 Birkin and 2 Kelly.  These bags are purchased by her directly from Hermes or from bag dealers like Prive Porter.

 Not only for personal use and plans to give these bags to their two daughters, Coca also considers them as security assets for the future.  “If anything happens to my business, I still have these bags to lean on” she said.

Hermès Birkin handbags skyrocket in price amid the pandemic

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