How they became the most popular investment for the rich

Hermes Birkin bags are much more appreciated than gold by the wealthy.

Symbol of ultimate fashion status, Hermès Birkin bags are some of the the most expensive bags in the world. Some say a Birkin is a better investment than gold or the stock market, with exclusivity helping to establish a thriving resale market.

In the equities, bonds and real estate landscape, designer handbags like the Hermès Birkin might be a better investment. Handcrafted bags are among the most expensive in the world, with prices ranging from $ 9,000 to $ 500,000 ordered for the Hermès Himalaya Birkin. According to the art market study (AMR), they now surpass art, classic cars and rare whiskeys in terms of investment potential.

According to Time Magazine, “The Birkin bag has surpassed both the S&P 500 and the price of gold for the past 35 years – a period chosen to reflect when the Birkin bags were first produced in 1981. They say that the annual yield of a Birkin was 14.2%, compared to the S&P average of 8.7% per year and -1.5% for gold. “

The origin of Birkin

Jane complained to her seatmate, not knowing who she was, that it was impossible to find a weekend bag she loved. After Dumas introduced himself and his position at Hermès, the pair spent the remainder of the flight sketching out possible handbag designs. Dumas introduced to Jane the homonymous bag one year later; the bag featured a spacious leather design perfect for everyday use. The bag pockets were useful and the seals prevented spillage.

Today every Birkin bag is made in France, using premium materials like calfskin, alligator skin and even ostrich skin. Each bag is made entirely by hand and symbolizes absolute luxury. They are also incredibly difficult to obtain. If you are planning to invest in a Birkin, you simply cannot walk into a Hermès store and purchase the bag immediately. You have to order it, and there’s a long waiting list that can go up to six years. Hermès also has a limit on the number of Birkin bags a customer can purchase per year.

There is the possibility of finding a reseller to reduce the waiting list as the resale market is booming, but the problem with this route is that the exclusivity of the item leads resellers to mark up the price by ~ 50% 100 %.

Handbag specialist Mason Howell asserted, “The high retail value and resale value is due to the fact that it is works of art. These artisans train years and years to make one of these bags, and they can even train 10 years before even being allowed to make a Birkin. “

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Accumulate its value

If you manage to keep your bag in good condition, you can expect a good return every year. Heritage researcher Knight Frank said that while the handbag market is driven by a variety of brands, the Hermès Birkin dominates the high-end market. Birkin bags rose 13% in value in 2019, according to the report, while another claimed the value of Hermès Birkin bags have increased by 500% over the past 35 years, an increase of 14% per year. This makes Birkin bags one of the best investments and far better than Art which has only seen a 5% increase in value.

The more a Birkin is difficult to buy, either because it is part of a limited version or because it is expensive at launch, the more coveted it becomes. One of these bags is the Himalayan Birkin, which is made from Nile crocodile skin and treated with a special dyeing process that turns it into a special white which fades into a smoky gray. It is not known how many Himalayan Birkins Hermes produced, but their numbers are low, experts say. The bag’s retail price was nearly $ 300,000 when it debuted in 2014, but the rarity of the Hermès bag drove the price up at auction, and it became the most expensive bag ever sold at $ 432,000. In 2018, The Himalayan Birkin broke records again after buying one for $ 500,000.

READ NEXT: 20 Most Expensive Hermès Pieces Ever Sold

Source: Times, Business intern, Style

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