— SINCE its creation 35 years ago the value of the Hermes Birkin has gone up 500 per cent. So what makes it such a good investment?
Broadly speaking, the world is divided into savers and spenders. There are those who gen up on pension plans and ISAs and always have something “put by” and then there are those who will blow a month’s salary on a replica designer handbag.
But is it ever possible to be both? In fact not only is it possible but in the current economic climate it is the handbag-splurger who turns out to be the cannier investor.
Of course it depends on the replica handbag but if you are lucky enough to own a Hermes Birkin you are in the money. That’s not just marketing hype but the considered view of investment analysts.
Consider the evidence. Since Hermes created the Birkin 35 years ago (naming it after English actress Jane Birkin who inspired its design), the bag has gone up in value by 500 per cent, which is a far better performance than the stock market and even gold, the quintessential investment commodity.
One analysis showed that between 1980 and 2015 gold returned an average annual increase of 1.9 per cent. The stock market returned an average increase of 8.65 per cent but replica Birkin bags trounced them all. They increased in value each year by 14.2 per cent.
And, unlike the gold and stock market, the value of the bag never fluctuated but kept increasing with each year and is expected to double over the next decade. The Hermes Kelly bag (named after Grace Kelly, the Hollywood actress who became Princess of Monaco) is equally covetable.
The only other luxury brand that holds its value as well is replica Chanel. The price of a secondhand classic, medium-sized Chanel replica bag with a flap has doubled in the last five years.
All of which makes a designer bag with the right label a better investment than gold bars. There is certainly no pension fund – and probably never has been – that could deliver anything like the same return.
If that stretches credulity bear in mind that last June in Hong Kong, a Birkin bag made of pink crocodile skin sold at auction for an astonishing £156. In 2014 a model known as Himalaya, made of pale crocodile skin described as “almost albino” with diamond embellishment, sold at auction for £129.
The price of a new replica Birkin bag starts at around £190. A plain black crocodile version currently goes for more than £260. But the resale price is always higher than the original. The online resale site 1stdibs offers a blue Birkin in matte alligator skin for £160 and a beige version for £165.
On the online auction site HermesReplica sellers are even asking upwards of £100 for a canvas Hermes bag.
Suddenly reality star Kim Kardashian’s collection of Birkins, kept in a glass case, doesn’t seem quite so frivolous but utterly credible as the investment she claims them to be.
But what makes a Birkin bag so very desirable and valuable?
Quality is obviously important. “Hermes is the only luxury company that has not moved into mass production,” says Sabrina Sadiq, head of pricing and authentication at Designer Exchange, a company which buys and sells used replica designer handbags.
With its 19th-century roots in saddlery, replica Hermes uses only the very best animal skins. Each bag is hand-made by skilled artisans in France who can easily spend 18 hours stitching together each one. Fancier versions with diamond decorations take even longer.
They are impervious to passing fashion trends and Hermes also offers a lifetime repair service, meaning the bags can be passed down as heirlooms.
But far more crucial to the brand’s popularity is scarcity. Hermes replica bags are in a perpetual state of “sold out”.
The company only makes a certain number each year and it is never enough to satisfy demand, which drives up the price and leads to waiting lists – currently six years for a Birkin.
The fact that celebrities such as Victoria Beckham always seem to have a Birkin dangling from an arm every time they venture out in public conveys status for the celebrity (because they have got round the waiting list) and makes the bags even more covetable for everyone else.
Those who can’t wait (and the super-rich never have to) simply hire someone to source a bag for them.
This is not simply a matter of going into an Hermes stockist. For a start the shops don’t carry much stock. Hermes also likes to see some evidence of brand loyalty before parting with a Birkin or a Kelly.
The only quick way to get one is at an auction such as the regular sales of vintage replica bags held by French auction house Artcurial in Paris and Monaco, where the customers are mostly super-rich Russian, Chinese and Middle Eastern women.
Rare colours and materials, such as ostrich, clasps and buckles (collectively known as “hardware”) in precious metals and personalised touches all add to the price tag – and to any eventual resale value.
Why bother with a pension plan which could easily turn out to fall short of what you need? When it comes to investing perhaps it really is in the bag.