When Jamie Chua bought her first “Birkin”, she didn’t have
much of a choice. In fact she didn’t have any choice as the only handbag in
this distinctive style in the Hermès boutique was a 40cm Rouge Vif. She no
longer has the bag, finding it too heavy to carry comfortably, but she has
added many others to her enviable 200-strong collection of designer handbags, primarily
from Hermès and Chanel.
Chua is such a good customer Hermès offered her the chance
to design a handbag, which she politely rejected: “I'm no handbag designer.
Instead I got them to make me unique piece in Oran embroidery.”
Her most prized handbag is a 30cm Himalayan Diamond Birkin, though
she confesses not her favorite to use: “I feel a little silly toting a diamond
bag around. It’s like screaming, ‘I don't know where else to pave my diamonds!’
So I use it for display," she explains.
While the Birkin takes its name from actress and singer Jane
Birkin, the Himalaya version refers to the snow-capped peaks of the mountain
range it is said to resemble with its gradation of pearly white to smoky grey. The
bag is so rare it’s often described as “the Holy Grail” in a handbag
collection.
“Hermès produces Himalayans in batches when the skins are
available. Some years they may produce 30, some years zero,” explains Diane
D’Amato, the director of Luxury Accessories at Heritage Auctions, adding, “The
first clients to get a Himalayan would be top Hermès shoppers who had
previously registered their interest with their sales associate.”
The resale value of Himalaya bags can be strong, typically in
excess of $100,000, which is around 40 percent more than their original store
price. In May, a diamond hardware version of a 30cm Himalaya crocodile Birkin
bag sold for $376,500 at a Christie’s auction in Hong Kong, setting a new
record for a handbag auction.
According to research by baghunter.com, an online platform
for buying and selling luxury handbags, Hermès Birkins make up 90 percent of
the secondary market for collectible handbags, and they have outperformed traditional
investment options in the last 35 years, averaging annual returns of 14.2% in
comparison to the S&P 500’s 11.66% nominal growth (8.65% real) and gold’s
returns of just under two percent (1.9%).
Jeffrey Berk, founder of Privé Porter, has found a
successful niche reselling “brand new” handbags the company he runs with his
wife have managed to source: Privé Porter is one of the biggest re-sellers of
Hermès bags and had sales totaling $20 million in 2016. “Women are willing to
pay us 50-100% over the retail for these bags to get them when they want them,
not when Hermès maybe lets them,” he says. About 90 percent of Privé Porter’s
business is conducted on Instagram, and a 35cm calfskin Birkin that would sell
for $12,000 in store might be offered for between $18,000‑25,000 with Privé
Porter. The business has been so successful that Privé Porter opened a swanky
showroom in a private townhouse in New York and is planning to launch its own
brand in early 2018, and Berk says the company will “probably expand into
auctions since we already have a bigger supply network than Christie’s or
Heritage Auctions.”
Jérôme Lalande, a luxury leather consultant at e-reseller
CollectorSquare.com, says for a luxury handbag to appreciate the rule is “keep
it in its box in a cupboard. Never use it,” but he also warns that not all Hermès
handbags will appreciate in value: “Some handbags will never increase. It’s only
those that come in a limited edition, a rare leather or a color that then gets
discontinued, or have a specific size (that will appreciate).”
Another tip to hold or add value, according to Berk, is to
bring your used bag to the “Hermès Spa” and get it refurbished as much as
possible. “They might replace the hardware for you. With this improved bag, you
also get the receipt for the Spa process which helps validate its
authenticity,” he explains.
Given the large number of fake luxury handbags, Chua warns
again buying from unknown sources: “I have bought one that turned out to be a
fake and couldn't locate the seller after. There are many such cases so my
advice is, only buy from a reputable source. Safest is from the store.”
The Birkin 'So Black' is another highly collectable handbag,
because it was only produced in limited quantities in 2009 and while it
originally sold at around €9,000, it can now easily reached €25,000, according
to Lalande.
But beyond the headline-grabbing Birkin, Lalande points out it
is the Hermès Constance bag that has shown the highest value increase over the
last 10 years, as its price has multiplied ten-fold. The bag was first created
in 1959, and named after the daughter of the then in-house designer. “Because Hermès
stopped the production of the bag for several years it became hard to find. And
while the production of the bag restarted four years ago, it still
appreciating,” Lalande says.
Chanel and Louis Vuitton are also popular with handbags
collectors, particularly for older bags. “These brands are more collectible
when you go back about ten years and start looking for limited-edition or
runway pieces. At that age, it's tough to find specific pieces in great
condition, which makes those bags more collectible,” D’Amato explains.
“Chanel has an extremely wide clientele base from the 15-year-old to
the 60-year-old, particularly for the "Timeless"* Classic Flap
Bag and the 2.55 bags. Some limited edition (versions of these) in tweed are
extremely hard to find and can fetch high prices,” Lalande says. While he
points out that not all of Louis Vuitton’s limited editions are highly
collectable —as the brand is increasingly releasing all its new bags in limited
editions —he singles out the Steven Sprouse Graffiti, which was the first artist
collaboration the French maison ever did, as the most sought-after of all its
artistic collaborations.
Amongst other collectable handbags, D’Amato says Judith
Leiber’s minaudieres, which are sought after for their sculptural designs, can fetch
around $1,200 at auction, though that market has “eroded” in recent years,
because devotees cannot fit their phone into the small bag. In the age of
Instagram, that’s just a no-no.
A version of this story was published in PRIORITY magazine (Oct-Dec 2017)
A version of this story was published in PRIORITY magazine (Oct-Dec 2017)