The reigning queen of luxury handbags, Hermes has been long prized by luxury handbag lovers. According to the Knight Frank Luxury Investment Index, luxury handbags were the top collectible investment of 2019 with a gain of 13%, a gain unmatched by other collectible investments or even the S&P 500 stock market index performance in 2019.
Hermes handbags are prized for their craftsmanship and exclusivity. Yet not all Hermes handbags will give you the same investment returns that made Hermes top the Knight Frank Luxury Investment Index. Here are the 5 things you need to consider before buying a Hermes handbag as an investment.
#1 Select A Timeless Model: Pick A Birkin Or A Kelly
Out of all the leather goods that Hermes produces, there are only two that remain sought after throughout the years: the Birkin and the Kelly. Named after the actress Jane Birkin and Princess Grace Kelly, these classic handbag designs have not changed since they were first produced. Much of the gain in luxury handbags on the Knight Frank Luxury Investment Index was driven by the increase in the value of Hermes Birkins.
One reason why these handbags have retained (if not increased) their value is their exclusivity. Hermes is said to only make only 12,000 Birkins a year and they are reserved for privileged customers. You cannot expect to waltz into a Hermes store and buy a Birkin off the shelf. If you are a loyal Hermes customer, you may be invited to purchase a Birkin or a Kelly, depending on the availability.
The Birkin is the most famous of Hermes handbags, with the Kelly is a close second. The Kelly comes in two versions: the Sellier and Retournes. The Kelly Sellier is more structured while the Kelly Retournes has a slouchier look. Both the Birkin and Kelly retain their value over time and are highly sought-after in the resale market.
#2 Colour, Leather And Hardware Matters
Crocodile hide is considered a high-end material for a Hermes handbag. The Himalayan Birkin is said to be the “Holy Grail” of Hermes handbags with the most expensive one being auctioned by Christie’s in 2017 for HK$2,940,000 or about S$500,000. The Himalayan refers to the subtle colouration of the crocodile hide which requires tremendous skill to achieve, with the grey fading into white, resembling the snow-capped Himalayas.
For an entry-level, you should expect to pay above S$16,000 for a first-hand leather Birkin. The most popular leathers for the Birkin are the Togo, the Clemence and the Epsom. These leathers are relatively hard-wearing, scratch-resistant and easy to care for.
You can’t choose a Birkin bag; if you are lucky, you are invited to purchase one. Given this exclusive nature of buying a Birkin, colour selection is often limited. The classic black Birkin can command a premium in the resale market, especially the black leather Birkin with gold hardware.
#3 Size Goes In And Out Of Fashion
Another consideration in picking a Hermes Birkin or Kelly for investment is its size. While mini bags are currently highly popular, mini bags were not well-regarded a few years ago when larger bags were in vogue. In general, avoid extremes in size (such as the mini bag trend and the extra large bag trend) when it comes to buying a bag for investment.
Medium to large bag sizes tend to be safe bets. This would be the 30 and 35 for the Birkin and 28, 32 and 35 for the Kelly. That said, there are other considerations in choosing the size of your bag. For example, Asians tend to prefer smaller sizes, thus a 25 Birkin may do better in the Asian resale market than in the European resale market. The smaller Kelly Selliers are preferred for formal occasions, especially in a colour, leather and hardware that matches the formal look.
#4 Condition And Maintain Your Investment
No collectible investment can go without talking about maintaining the condition of the collectible. If your Hermes handbag is made from one of the 3 most popular leathers (the Togo, the Clemence, the Epsom), they are likely to be relatively easy to care for. These leathers are more scratch-resistant compared to the other more delicate leathers that Hermes uses. Exotic leathers, such as crocodile hide, will require more care and it may not be a good idea to use the bag as an everyday carry if you intend to keep it as an investment
Humidity is always an issue for leather goods in Singapore, so you should have a dedicated storage solution, especially if you intend to keep your Hermes handbag in prime condition with the intention to resell. If your authentic Hermes handbag needs some tender loving care, you can also bring it to the Hermes Spa (Hermes in-house bag conditioning and repair service) where they can recondition your bag or even make more complex repairs such as replacing the handle.
#5 Authenticate Your Resale Purchase
One of the trickiest things about buying a Hermes handbag for investment is the authenticity of the handbag if you are buying from the second-hand market. You should always go through a reputable reseller.
While Hermes does not authenticate or verify products sold outside of its stores, the resale market for Hermes handbags has created an environment where external experts can authenticate your potential Hermes purchase for you. You can and should request for authentication prior to purchase through reputable resellers or third-party authenticators. While this is an additional cost on top of the high purchase price, it is a cost worth paying to ensure that your potential investment is not a fake.