HERE’S HOW TO MAKE SURE YOUR NEXT BAG IS AS MUCH AN INVESTMENT PIECE AS A TREASURED ACCESSORY
By Barbara Tunick
The name Hermès epitomizes the ultimate in grace, sophistication and luxury. And nothing embodies that spirit more than an Hermès Birkin or Kelly bag. Once coveted only as a beautiful, stylish and elusive accessory, today Hermès handbags are collected not only for their rarity, prestige and provenance but also as a reliable collectible investment. According to a recent report by Knight Frank, handbags were one of the top-performing luxury asset classes last year, surpassing wine and jewelry, with the resale value of luxury bags rising by 92% over the last decade.
Diane D’Amato, Director of Luxury Accessories, Private Sales & The Boutique at Heritage Auctions, notes that among those handbags, Hermès creations hold the highest resale value on the secondary market and garner the strongest results at auction. “Hermès bags consistently retain their value more than any other luxury house,” she says. “There’s a prestige and a mystique about Hermès, like no other. They are the epitome of luxury, of fashion, and collectors absolutely love them.”
That’s true in part because Hermès remains loyal to its bespoke harness and saddle-making heritage. Each Birkin bag is still handmade by one artisan from start to finish, and it can take up to 40 hours to create a single Birkin. The craftsperson uses two needles to simultaneously pass through the same seam, creating a saddle stitch. If done correctly, the stitch will never unravel and cannot be replicated by a sewing machine.
To buy a Birkin, one cannot simply walk into an Hermès boutique and pick out a bag. “It takes time, sometimes years, to cultivate a relationship with a sales associate, buying from several different métiers, including ready to wear, shoes, jewelry and leather goods, before you might be given the opportunity to purchase a Birkin,” D’Amato says. “Even then, it may not be the Birkin you want, but simply the one offered to you. Even though it may not be the color or skin you wanted, you’ll take it in order to stay in the good graces of your sales associate so you will hopefully be offered another later on.”
When it comes to auctions and private sales on the secondary market, however, collectors can buy the bags they want when they want them. “I always advise my clients to buy what they love,” D’Amato says, “and they actually can on the secondary market.”
Style and Condition Matter
There are certain factors that make some Hermès bags more collectible than others, resulting in a higher resale value. “The Birkin and Kelly are undoubtedly the two most collectible and desirable styles,” D’Amato says. “Their signature look and unparalleled craftsmanship continually make them the most valuable and collectible pieces. Kelly Pochettes, Special Orders and rare collectibles are also great investment pieces. There’s also a newly released Kelly Elan that is absolutely incredible and highly desirable.”
Special Order, or Horseshoe, bags are extremely limited, which increases their value and desirability. These custom-made bags, also called HSS bags, feature a horseshoe stamp inside the bag, to the left of the Hermès logo. Each season, Hermès offers this highly exclusive bespoke service to only a select few loyal clients. The bags are customized in the most desirable colors and materials and may feature contrasting interiors and stitching, bi-color and tri-color variations, and customized hardware. (Tri-color isn’t currently being offered, which makes those bags even more desirable and valuable.) It then takes anywhere from six months to three years for Horseshoe bags to arrive.
Bags in pristine, store-fresh or like-new condition best retain their value and have the greatest increase in value. However, there are always exceptions to the rule. “Collections that are highly sought after, rare and no longer available can still bring record auction results even when they’re not in perfect condition,” D’Amato says, adding that collectors look for full sets, complete with keys, clochette, dust bag and box.
Size, Color and Skin Make a Difference, Too
When it comes to collecting Hermès bags, bigger isn’t always better. “The trend continues to run small,” D’Amato says. “Mini Kellys, Mini Birkins and 25cm Birkins and Kellys are the most desirable bags right now. Of course, there are still many collectors who love 30cm bags and larger. And, truly, in my opinion, there’s nothing like walking into a room with a fantastic 35cm Birkin on your arm.”
As for coloration, D’Amato says pink is the most desirable Hermès color, with 5P Bubblegum Pink, Mauve Sylvestre, Rose Shocking, Rose Scheherazade and Magnolia ranking as some of the most sought-after hues. “While Hermès created pink for the U.S. market, it turns out the entire world loves pink, with 5P still holding the greatest value,” she says. “Black, gold, gray, bright colors and neutrals are also great choices.”
The choice of skin also determines a bag’s value. Exotics, including alligator, lizard, ostrich and the two species of crocodile – Porosus, which has smaller scales with distinct pores in the center that look like little dots, and Niloticus, with longer, more rectangular scales – consistently garner some of the highest resale prices.
The Best Collections Make the Best Investments
Rare and special pieces like Faubourg Birkins, Mini Picnics, metallics and Jean Paul Gaultier’s So Black creations are consistently the most valuable on the secondary market. “The Faubourg Sellier is a gorgeous little bag that replicates Hermès’ flagship boutique in Paris,” D’Amato says. “They’re currently selling for more than $300,000 on the secondary market. Metallics are also tremendously strong, with a great track record. We sold a 25cm metallic Kelly, which is no longer created, for $130,000 in a private sale. The original cost was between $6,000 and $7,000.”
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The monochromatic So Black collection, with its all-black leather (or skin) and hardware, also continues to be in demand. But it’s Hermès’ Diamond Matte White Himalayan Niloticus Crocodile Birkin and Kelly bags that are the ultimate finds for any serious luxury collector. Just last year a 30cm Diamond Himalayan Birkin hammered for more than $450,000, making it the most expensive bag ever sold at auction. Its estimated retail price: $300,000.
Diamond Himalayan Birkins and Kellys are created by pairing diamonds set in 18k white gold hardware with one of the scarcest materials on earth – the hide of the Nile crocodile, which is meticulously hand-dyed to lighten its smoky gray coloration into a luminous white ombre, evoking the majestic snowcapped Himalayas. “Himas are the most spectacular bag and the rarest ever created, and Kelly Himas are even harder to find than Birkins,” D’Amato says. “When you find a perfect bag, it’s not only exhilarating; it can also be financially advantageous – especially if it’s a Hima.”
BARBARA TUNICK is a contributor to Intelligent Collector.