The term ‘investment piece’ gets thrown around a lot in the fashion world, but while the idea of treating shopping as a business venture can be dubious in most cases, there’s at least one item that can, truly, bring lucrative returns: an Hermès Birkin bag.
In a fascinating new study, luxury handbag platform BagHunter compared the investment opportunities presented by the S&P 500, gold, and Hermès Birkin bags over 35 years.
They found that on average, people will get a better return on their investment from Birkins than stocks or gold – and there is also a lot less risk involved.
Profitable purses: A study by BagHunter found that Hermès Birkin bags offer a better return on investment than the top stocks or gold
Coveted: The price of Birkins has steadily risen, while their resale value has always turned a profit
For the study, BagHunter compared the value of each of those investments over a 35-year period, from 1980 to 2015.
During those years, the S&P 500 showed a real return average of 8.65 per cent. That’s certainly not bad – but it’s also just the average over three decades.
That number doesn’t reflect the fact that those returns majorly fluctuated over the years, and investors sometimes saw losses – as low as negative 36.55 per cent in 2008.
Gold’s overall returns were worse. Investing in the precious metal saw average real returns of negative 1.5 per cent over the 30-year period. Like the S&P 500, though, prices rose and fell a lot over the years and were hardly consistent.
But that’s not the case for Birkins. Though the bags have experienced some fluctuations in value, it has only been positive – meaning, sometimes a person could make a lot of money by reselling one, and sometimes they could only make a little money.
Playing the game: From 1980 to 2015, stock prices fluctuated greatly, so while the average real return was 8.65 per cent, selling at the wrong time could have meant major loses
Not-so-solid gold: The ‘gold standard’ doesn’t seem to be as good as the ‘Birkin standard’, since gold has seen average real returns of just 2.1 per cent over the past 30 years
Birkins always returned a profit, with an average of 14.2 per cent and the lowest returns still hitting 2.1 percent.
This all means that investing in stocks and gold is much more of a guessing game, while Birkins are more of a sure thing. If you sell stocks or gold at the right time, you profit, but if you sell at the wrong time, you don’t. Birkins, on the other hand, could be sold at any time for at least some profit.
Why is this? For one thing, demand for the structural tote bag has never waned.
French fashion house Hermès first created the style in the early ’80s, when the brand’s artistic director Jean-Louis Dumas wanted to make a bag for actress Jane Birkin. Since then, they’ve remained an incredibly coveted status symbol, retailing for upwards of $10,000 (and well into six figures depending on the color, material, or customizations).
They continue to be desirable thanks to their habit for turning up on the arms of supermodels, Hollywood actresses, and singers, some of whom – like Victoria Beckahm – are famous for their large collections.
Variations: Birkin bags sell for upwards of $10,000 retail, but can cost a lot more depending on materials, color and size
So Hollywood: They’ve remained a status symbol, thanks in part to stars like Miranda Kerr who are photographed carrying them
But they are also remarkably popular because they are so exclusive. Anyone can play the stock market or buy gold if they have the cash, but Birkins are so much harder to get one’s hands on.
Hermès has a years-long wait list to buy, and shoppers often need to have connections – and a reputation for spending on the brand – in order to have the privileged of shelling out several thousands dollars for one. Stores also only get deliveries of about two Birkin bags a week, so there are never any just sitting on shelves.
‘No one can walk in and buy a Birkin “from the back”,’ Michelle Goad, CEO of personal shopping app P.S. Dept., told Bloomberg. ‘The key to getting one is to find someone who has a relationship with one of their associates, [which means they’ve] bought one in the past.’
These factors all drive the secondary market, where people who can’t get the bags through regular channels – or refuse to wait – are willing to pay major mark-ups for access.
Filthy rich: Victoria Beckham famously has over 100 Birkins, and her collection is estimated to be worth well over two million dollars
Have to buy to buy: In order to buy one, shoppers (like Heidi Klum) have to have connections or a reputation for spending on the brand
In fact, the spring of 2015 saw the most expensive handbag ever sold at auction – and, naturally, it was a Birkin.
The shiny fuchsia crocodile Birkin, complete with white gold and diamond hardware, sold at Christie’s in Hong Kong for $223,000.
Rachel Koffsky, Christie’s Associate Specialist for Handbags & Accessories, told Daily Mail Online that she’s definitely noticed that the value of these bags has gone up over the years.
‘After the recession, many women and men began to view their handbag collections as assets to protect and invest in like any other high value purchase,’ she said. ‘These buyers know that Hermès bags are made with only the finest materials and techniques, and that purchasing an iconic piece from a heritage brand like Hermès is a wise investment for both the immediate and long-term.’
Unique: A Christie’s specialist told Daily Mail Online that coveted colors – perhaps like Gigi Hadid’s blue bag – fetch more in the secondary market
Collectors: Kim Kardashian and the rest of her family own several Birkin bags in different colors and materials; however, they don’t fetch as much when sold used
Though she added that there is even a market for bags in ‘gently used condition’, it’s the mint-condition ones that fetch the most. Other factors like colors, materials, and rarity also play a part.
‘A standard size, one-color, leather Hermès Birkin bag in ‘as new’ condition would be given an auction estimate of $10,000-$15,000,’ she explained, but they can actually sell for more. Particularly desirable colors can even earn 200 per cent of the estimate at auction.
‘In one-of-a-kind leather iterations, we have had instances of [them] achieving over $60,000,’ she added. ‘Exotic skins, such as ostrich, lizard and crocodile, achieve the highest value on the secondary market, as these materials are very rare, time-consuming, and difficult to produce.’
The most expensive kind, a Himalayan crocodile Birkin, often earns an auction estimate of approximately $65,000-75,000 – but can sell for over $160,000.