With luxury industry insiders claiming that handbags are becoming a safer investment than the stock market, affluent women now seem to have the perfect excuse to splurge on a Birkin.
According to a luxury bags online reseller called Baghunter (baghunter.com), only the Hermès Birkin has outdone both the price of gold and the S&P 500 in the last 35 years.
It said the average annual return for the Birkin is about 14.2 percent, versus S&P’s 8.65 percent and gold’s -1.5 percent.
The flagship product of the French luxury house has also been fetching record prices at auctions, with Christie’s in Hong Kong selling a fuchsia crocodile-skin Birkin with 18-karat gold hardware studded with diamonds at $223,000 in June last year.
Christie’s now also has a dedicated handbag shop on its website, apart from holding regular luxury handbag auctions.
But do women really consider investment a priority when they put their name on the infamous years-long waitlist for a Birkin?
“I buy for fashion and style, and the brand name,” said Agile Zamora, who has in her collection about five Birkins, in varied sizes and materials.
During this interview at the launch of a luxury skincare brand, the socialite was toting a 25-cm purple Hermès Kelly.
Zamora prefers Hermès and Bulgari. She owns different bag styles from both brands, and the occasional Louis Vuitton, “but only if it’s a limited edition,” she added.
“Hermès styles are classic, and I want pieces I can wear to different functions,” she said.
While the idea of buying for investment isn’t top of mind, she acknowledges that her luxury purchases are justified “because their value appreciates, especially the crocodile skin.”
Janet Go (not her real name), who was in the same event carrying a fuchsia ostrich Birkin, said she buys “partly for investment.”
Unlike Zamora, Go buys various brands, in trendier styles. She has eight Birkins in her collection.
“I do buy a lot of bags, and my purchases depend on style and function,” Go said. “But owning an Hermès is different, because it has become a status symbol, and the Birkin’s style will remain a classic.”
Zamora said she has never thought of disposing of her bags for profit, as each holds sentimental value. She and Go hope to hand them down to their daughters.
Ingrid Chua, the TV presenter and blogger famously known as The Bag Hag (thebaghagdiaries.com), said she thinks most women don’t consider the investment value when they plunk down the minimum half a million pesos for a Birkin, “but it certainly is a factor.”
“There are also women who buy the Birkin because it has become a status symbol—that being able to afford a bag with this price tag means they are of a certain social and financial standing,” Chua said. “It is a brag bag, if I may be blunt.”
Unlike styles from other popular luxury brands, Birkins are famously hard to acquire. Because of wait lists, having the cash doesn’t guarantee you could own one.
Hermès declined to comment on the local retail price of its famous bag, but a 35-cm regular leather Birkin would cost from P500,000 to P520,000 if you buy it from the boutique, said Chua. The reseller price can go as high as P1 million, depending on the color. “Limited-edition or special-order ones cost a whole lot more,” she added.
Zamora, who buys her Birkins only at the Hermès boutique in Greenbelt, fretted that the store allots her only one purse a year, if at all. Still, she said she feels lucky, as she’s a valued loyal customer; some of her friends have been on the waitlist, with little luck.
“When I got my first one, I was so happy! I put my name down on the list. I didn’t care what size or color, as long as they could give me one,” Zamora said.
“The Hermès Birkin is considered the Rolls-Royce of bags—being able to buy one from an Hermès boutique is almost next to impossible, especially today, with the increased demand from Asian countries for it,” said Chua. “Women want to buy the Birkin because the bag is very well-made and designed, and does hold its value.”
Chua agreed that Hermès Birkins and Kellys are good investment pieces that hold, and may even increase, their value over time “as long as you did not purchase them at black-market prices. If you had purchased either of those two bags directly from the boutique, you can still get a decent return on it should you sell it.”
That may not apply to other labels, with some industry insiders likening brands like Chanel and Louis Vuitton to brand-new cars losing their value exponentially the moment they’re driven out of the parking lot.
“Chanel and LV bags don’t always appreciate in value,” Chua agreed. “However, if people are looking to buy bags from these brands as investments, I suggest they purchase bags that are produced in very limited quantities—pieces from the runway collection or special collaborations. The limited-edition bags from Chanel and LV have a higher chance of appreciating in value over time compared to the classic pieces that these brands offer, which are readily available in-store at any given time.”
Other experts also say buying from brands which don’t have their own e-commerce sites, like Celine, have good investment returns, as you’re assured there’s no flood of stocks in the market.
Still, if you had kept a Chanel classic flap purse bought in the 1990s “in excellent condition with little sign of wear,” you could potentially still get a good return should you decide to sell it, Chua said.
Supply and demand
In the end, prices of these bags are driven by supply and demand, adds this bag expert.
“Christie’s is making good money on their bag auctions because there is a very strong demand for Hermès Birkin and Kelly bags,” said Chua.
“And Hermès is not churning out enough of these bags to meet the demands of the buyers—most of whom are from Asia. There are a lot of resellers of these coveted bags, but buyers have become more discerning and more careful because of all the scheming and unscrupulous resellers who want to make a quick buck by selling counterfeit Birkins and Kellys to those who want these bags, but can’t get them in-store, and have had very little research done on what a real Birkin or Kelly looks like.
“Christie’s is one of the most credible auction houses and, therefore, there is trust placed on the institution. And buyers are willing to pay a premium for these bags from them because they know they are buying the real thing. There is a higher price to pay for authenticity and guarantee because of the institution’s integrity and credibility.”
Should one consider buying a purse for investment, Chua’s advice is to do thorough research first.
“Bag forums and blogs are helpful reads,” she said.
“Find out more about the bag first, gauge the current demand for the bag you intend to buy. And the best advice I can give is, to buy the bag directly from the boutique. I discourage getting them from the black market because of the bloated prices and the uncertainty over authenticity. Counterfeit designer bags are so good now, quality-wise. It is so easy to be fooled into thinking the bag is ‘real.’
“Lastly, if you are buying a bag for investment, at least make sure it is a bag you really like, too. This way, if it doesn’t get sold, you still love the bag anyway. And that’s not money lost!”