Applying dye to crocodile leather is a tricky, time-consuming business. And the lighter the shade, the trickier it gets.
That’s just one of the reasons why the Hermès Himalaya Birkin is so valuable. The name refers to the delicate gradation of the bag’s colouring that fades from a gentle shade of smoky grey to a pearly white, mimicking the snow-capped mountains of the Himalayas. While nobody knows for sure, experts speculate that Hermès only makes one or two Himalaya Birkins each year, precisely because it takes so long to get the colouring right.
This rarity has made the Himalaya Birkin the most valuable handbag in the world. Officially. On May 31, a 2014 Himalaya became the most expensive bag ever to be sold at auction. After a 15-minute flurry of intense bidding at a Christie’s sale in Hong Kong, the bag, which has buckles crafted from 18K gold and diamond-encrusted strap loops, fetched US$379,261 (Dh1.4 million), surpassing the sales estimate of $193,000 to $258,000 by a considerable margin. Christie’s went on to set another record on June 12, when it sold a 2007 Birkin in blue porosus crocodile leather, topped with white gold and diamond hardware, for $196,540, as part of its first-ever handbag auction in London. This marked a new record price for any handbag sold at auction in Europe.
Whether or not the boxy, oversized, curiously casual proportions of the Birkin are to your tastes, there is no denying that it is the rock star of the handbag world. It is easily more famous than Jane Birkin, the actress after whom it is named, and its story, price tag, celebrity owners and much-discussed waiting list have ensured that it is entrenched in fashion history. All of which is underscored by the fact that Hermès is notoriously tight-lipped about it – no one will go on record to say how much a new Birkin costs, how long one would have to wait to get one, and how many bags are actually made each year. This all feeds into its mythology. There is also the feeling that Hermès might just, after 30-odd years, be tired of being asked about the Birkin. It has developed such a cult status that it overshadows anything else the brand does.
Largely driven by demand for the Birkin, as well as the Hermès Kelly, the market for second-hand handbags has flourished over the last decade, transforming what was once considered arm candy into a viable investment category. “Handbags are no longer viewed as just an accessory. Many women now carefully select a handbag based on its social status, investment potential and resale value. Vintage, limited-edition and collectible handbags have created a thriving secondary market that didn’t exist 20 years ago,” says Shea Robinson, director of press relations for Baghunter, an online platform dedicated to buying, selling, consigning and swapping luxury handbags.
Heritage Auctions launched a dedicated luxury accessories division six years ago, to capitalise on growing demand for “pre-loved” bags. Diane D'Amato, director of luxury accessories at Heritage Auctions, held high-profile positions at Hermès and Louis Vuitton prior to joining the auction house, and tidily sums up the appeal of Hermès handbags. “Craftsmanship and accessibility,” she says. “Hermès is timeless. These handbags are works of art. ”
And yet, it seems incredible that no other luxury fashion label has created anything that competes with the Birkin, in terms of both covetability and resale value. Has anyone even come close?
“Not yet,” says Matt Rubinger, who heads upthe handbags and accessories division at Christie’s, and is a world authority on the subject. Rubinger attributes some of this to the age of the ‘It’ bag. While Hermès was crafting its coveted pieces to the highest specifications and in very limited numbers, many of the other big brands were focusing on creating the bag of the season, which would be carried around with pride for a few months, and then be quickly forgotten. Anyone who recalls Dior’s Girly collection will know exactly what he means. A classic it was not.
So, while Hermès stayed true to the course, and has been incrediblyadept at controlling supply and demand, other luxury brands focused on mass appeal, using their accessories divisions as a way to shore up profits and broaden their customer base.
A cursory scroll through the lots in Heritage Auctions’s latest luxury accessories sale, which took place on June 27, highlights the sheer number of bags and brands on the market, but also the disparity of their worth on the secondary market. The sale included popular pieces such as Gucci’s Dionysus and Marmont matelassé, Louis Vuitton’s Speedy and Alma, Alexander McQueen’s Knuckle Duster Clutch and Bottega Veneta’s Esperanza, as well as a host of Chanel bags, including a bright pink python Boy bag, and a limited-edition blue, pink and white, beaded-satin, medium double-flap bag, which sold for $5,750 and $7,812 respectively.
According to D’Amato, Robinson and Rubinger, Chanel, Louis Vuitton and Gucci are the only other brands that do well at auction, particularly when it comes to limited-edition and exclusive pieces. “Look at the history of some other French labels and try to identify bags produced in smaller editions or special colours and materials,” Rubinger advises anyone who is looking at investing in a handbag but doesn't have the funds for an Hermès.
“The next best brand for investment is Chanel,” Robinson adds. “Since 1955, the value of Chanel flap bags has continually increased, including a 70 per cent surge in value since 2010.”
Baghunter famously made headlines in 2016 when it released research suggesting that a Birkin was a better investment than gold. It discovered that the value of the Birkin had consistently risen by an average of 14.2 per cent between 1980 and 2015, outperforming both gold and the S&P 500 Index. The company carried out a similar research study into Chanel’s medium classic flap, or 2.55 bag, discovering that: “The Chanel medium classic flap bag has increased in value by a whopping 71.92 per cent between 2010 and 2015, far outperforming housing prices in the United States [which increased by 8.1 per cent in the same period], the S&P 500 [which increased by 13.2 per cent], and inflation [which rose by 8.7 per cent].”
The study also explored the performance of Chanel’s Boy bags. “Due to their popularity upon release, they experienced a surge in value in a very short space of time. However, the popularity of the small size over the medium size saw that particular bag rise in value by 53.84 per cent, while the medium bag only rose in value by 31.25 per cent. This is an interesting piece of information for investors who are seeking to spot the next big investment opportunity,” Robinson notes.
However, while Chanel may be making some inroads, it seems highly improbable that any brand will be able to challenge Hermès’s dominance of the secondary marketin the short to medium term. “The reputation and marketing strategy of Hermès will keep its handbags as the most desired on the secondary market for many years to come,” Robinson predicts.
In order to truly compete, a brand would have to create an iconic bag that somehow captures the imagination of the consumer; demand for the bag would have to surge and remain high for decades, and would need to totally outstrip supply; production numbers would have to be kept low, regardless of the commercial temptation to capitalise on its popularity in the short term; and quality would need to be kept exceptionally high, consistently. Then, maybe, you would have a real contender.
Rubinger does lament the fact that there is not more variety at the very upper echelons of the second-hand handbag market, but notes that there are enough variations of Hermès bags to keep things interesting.
“Sometimes I think it would be nice to offer more variety but, having said that, the multitude of Hermès bags available are offering this variety – in terms of colour, shades, hardware, and special or customised editions,” he says. For now, at least, these will have to do.
